Competency Models-Benefits and Challenges

Competency models
benefits and challenges
Competency models
Insights from 2010 survey on
practical application in Bulgaria
ADVISORY SERVICES
Content
Introduction
About the survey
KPMGs view on survey results
The results in detail
10
Appendix
33
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
Competency models
Introduction
We all witness and actively participate in the changes in the economic
environment and their impact on the way we work. Faced with a variety of
challenges, companies are looking for more ways to optimise business processes
and costs, and increase individual as well as organisational efficiency.
Encouraged by the growing interest towards the topic of efficiency we at
KPMGs People & Change Advisory practice endeavoured to carry out a survey
on one of the methods for increasing personal and organizational efficiency the
competency models.
We will take a brief look at what competencies are and how they support the
achievement of high business results.
The term competency was introduced to the Human Resources management in
the early 80s of the 20th century. In 1982 the American scholar Richard Boyatzis
wrote his book The Competent Manager: A Model for Effective Performance,
which exerted serious influence among human resources management
specialists. For over three decades now, competencies and competency models
have become an inseparable part of Human Resources management and have
been widely used as means for increasing personal and organisational efficiency.
As the terms competence and competency were gaining popularity in the
80s and 90s, a semantic differentiation between them was needed, namely
to use competency to denote specific behaviours and skills an employee
should possess in order to be able to achieve high performance levels, and
competence to refer to a level of specific knowledge and skills necessary
to carry out a task. With time a strong tendency has been imposed for
interchangeability of the two terms in both English and Bulgarian.
In this paper we use the term competency to denote a combination of experience,
knowledge, skills and the attitudes necessary for the successful performance of
a specific task or in a specific position. These can be developed through various
forms of learning, both at the workplace and in everyday life.
To support organisations in identifying and attracting suitable employees
and in acquiring the skills and behaviours necessary for the achievement of
business results, HR specialists develop integrated systems of complementary
competencies competency models.
Competency models are widely applicable in Human Resources management
processes for instance in recruitment and selection, learning and development,
career planning. The benefits from using them include employees having a clear
understanding about the behaviours and attitudes encouraged in the organisation,
transparency and fairness of the performance management and talent
identification and development processes.
Despite the indisputable benefits of the competency models, the development
and implementation process is long and complicated and accompanied by a variety
of challenges to be overcome.
That is why we decided to invite different organisations in Bulgaria to share their
experience with competency models and the challenges they face.
Competency models
About the survey

For the purposes of the survey on competency models we at KPMG designed a
questionnaire. It consisted of 12 statements focused on areas of application and
the process of designing and implementing competency models.
For each statement participants were asked to choose between a set of
predefined answers. For most, respondents had the opportunity to select more
than one option. For seven of the statements an additional response could be
provided.
Eighty-eight organisations from different industry sectors (Financial services,
Trade, Information Technology, Telecommunications, Media (ITM), Energy,
Pharmaceuticals, Public Administration and Manufacturing) took part in the survey
on competency models.
In order to identify some tendencies and differences, we have also split the
participants into different groups according to approximate number of employees
(Up to 50 employees, From 51 to 100 employees, From 101 to 500 employees
and Above 500 employees), type of ownership (International and Bulgarian) and
presence on the Bulgarian market (Up to 3 years, From 3 to 5 years, From 6 to 10
years and 11 years or more). A detailed profile of the participants is presented in
the Appendix.
Competency models
KPMGs view on survey results

Purpose
Our survey shows that most organisations take into consideration the need for a
competency model that supports corporate strategy and values, translating them
into common and comprehensive criteria for successfully performing activities in
a company. Introducing such a system is in most cases was triggered by the need
to increase personal and, resulting from that, organizational efficiency. Almost half
of the respondents aim at strengthening employee commitment. They rely on
competency models to also support management by providing practical guidance
and objectivity regarding the achievements and behaviours that need to be
encouraged in the organisation.
Applicability
To achieve the above-mentioned aims, competency models are integrated into

different Human Resources management processes. In terms of increasing
personal efficiency and supporting the management, for instance, a significant
portion of the organisations apply competencies to performance management.
Within the performance management system competencies are integrated
predominantly with personal development goals (followed by business and
financial goals), which is once again related to the focus on employee engagement
and increased efficiency. In addition to this, the model is applied to training needs
analysis, career development, talent management, assessment and development
centres as well.
Level of detail
The purpose and areas of applicability of the competency model to a large extent
determine the level of detail in which it is developed. The survey results reveal
that organisations which develop competencies in greater detail (with behaviours
and levels of demonstration) use them much more often for specific activities
such as training needs analysis, talent management and
360 degree feedback (compared to participants that present their competencies
by titles and descriptions only). Regarding the number of competencies included
in the model, organisations most frequently choose 6-9 competencies. The level
of detail of competencies has an impact on the efficiency of the model, its clarity
and accessibility, as well as employees attitude
towards it.
Stage of introduction
The introduction and application of a competency model is related to the stages

of development of an organisation. It is worth noting that a significant share of
small companies (up to 50 employees) as well as those that recently entered the
Bulgarian market (up to three years) do not envisage introducing a competency
model in the next 1-2 years nor, at the time of completing the survey, are they in
the process of developing or implementing one. Participants from companies with
a shorter presence on the Bulgarian market (up to three years) point out that their
competencies in most cases are presented by titles and descriptions only.
Competency models are in the process of being developed, introduced or
reviewed and updated in all companies from the Pharmaceutical sector that took
part in the survey, and they are opting for a smaller number of competencies.
Competency models
Target group
Almost half of the manufacturing companies still do not have an implemented

model, which is either about to be developed or is not envisaged for development
in the near future.
Types of competencies
This sector also stands out in terms of the target group to which the competency
model is applied or is going to be applied most often to managers and to key
specialists only (Manufacturing). Organisations from the other sectors most
frequently apply their competencies to all employees.
In view of building a competency model applicable for the different target groups,
in most cases organisations integrate core, specific and technical competencies
(or just core and specific). Technical competencies are used in combination with
specific and/or core ones. Core competencies are valid for all employees in an
organisation and are aligned with its mission, strategy and values. They reflect
the core skills necessary for its success. The specific competencies are related
to certain behaviours, attitudes and skills relevant to the different functions in an
organisation and are focused on resolving more particular professional tasks and
problems, typical for the workplace and position.
Selecting an approach
The process of developing and implementing a competency model in the

organisation is a long one and is accompanied by carrying out in-depth analysis
and overcoming a variety of challenges. Likely due to this complexity and in view
of the need for the competencies to reflect corporate values, almost half of the
surveyed organisations utilise the opportunity to adapt a ready model from a
parent company (headquarters). Companies without international ownership rely
mainly on internal resources.
Critical moments in the

process of development
and implementation
The choice of approach determines to a certain extent the critical moments

to be expected in the process of developing or adapting the model. Bulgarian
companies, for instance, as well as the Public Administration representatives
experience to a great extent difficulties related to the need to achieve consistency
between the different competencies and avoid overlap of content.
Overall, the most frequently experienced challenge is related to achieving a clear
alignment between the competencies and the organisations business goals.
Other difficulties include achieving clarity and user-friendliness, applicability of the
competencies to all employees and reflection of corporate values.
The difficulties that participants in the survey face at the implementation stage
are related to the practical application of the model, the purely formal attitude,
insufficient understanding of managers about the advantages of the model and
employee resistance towards accepting it.
A comparison between the challenges that restrained these organisations with
already implemented and operational models and those faced by participants
with models which are not functioning or are envisaged for update reveals some
interesting tendencies. Companies that evaluate their competency models
as not functioning have to a greater extent been hindered by an insufficient
understanding on the part of managers about the advantages of the model, as
well as by employee resistance to accepting the model. Participants that plan to
revise and update their models due to certain reasons share that they have also
Competency models
faced stronger employee resistance to accept the model as well as difficulties in

achieving relevance/applicability of the competencies to all employees from the
target group and ensuring clarity and user-friendliness.
This group of participants more often points out the inability of the existing
model to meet the needs of top management as a reason for changing the
competencies. At the same time, generally the survey participants share the
opinion that a change in strategy would trigger a change in their competency
model as well.
Useful steps
The present economic situation encourages more and more organisations to

review and further develop their competency models or plan their introduction
if they do not have one already. One-fifth of the participants with implemented
competency models reveal that those models are currently not operational or
need to be updated. Results from the present survey coupled with KPMGs
experience in designing and introducing competency models as part of larger
initiatives help to identify key moments within the different phases of the process
that influence the success of the model:

precise definition of the purposes that the organisation aims to achieve by

introducing a competency model already during the planning phase. The
purposes determine to a great extent the selection of approach, areas of
application, target group, level of detail and types of competencies
analysis of the advantages and disadvantages of the possible options and

selection of an optimal approach, taking into account the specifics of the
business, the history of the organisation and the available internal capacity
clear definition of the areas of applicability of the competencies and planning

their smooth integration in the respective processes
analysis and definition of the necessary level of detail in view of the purposes
and areas of applicability of the model
definition of the target group the employees to which the competencies will
be applied
alignment of competencies with corporate values and the organisations

strategy
clear, accessible and unambiguous presentation of the competencies most

often a description on a behavioural level that can be easily observed (and
respectively measured)
integration of the competencies in a unified model, avoiding overlap of their

content
analysis of the attitudes towards the introduction of a competency model

in the company, identification of the reasons for possible resistance (for the
different groups) and planning specific steps for overcoming it
preparation of a communication plan, messages and initiatives
envisaging employee availability for participation in the process of design and

introduction of the model and their involvement in view of gathering accurate
information and facilitating the acceptance of the model
checking of the relevance/applicability of the competencies to all participants

included in the target group at an early stage of the process
planning and conducting initiatives related to managers and employees

training on how to work with the model focusing on its practical benefits
follow-up on whether the competencies are up-to-date and timely

amendment if necessary.
Competency models
It is our conviction that these steps can be useful in the process of developing and
introducing a competency model which pertains specifically to your organisation.
We believe that the time, efforts and capacity required for its successful
integration are well justified as the competency model builds the core of Human
Resources management. Competencies provide a clear signal to employees
regarding encouraged behaviours and attitudes, guiding them towards achieving
high results. Different parts of the competency model complement each other
to enable the harmonious functioning of the processes in the organisation. Thus,
the model reflects the identity of your organisation both internally and externally
towards your partners and clients.
10
Competency models
The results in detail

A significant portion of the
companies have a developed
competency model.
Results from the survey reveal that one-third of participants that took part in
it (36.4%) already have an implemented and operational competency model.
Designing such a model is planned by 17.1% of participants and an update is
envisaged for 11.4%. The percentage of companies which are in the process
of designing a competency model equals that of organisations in the process of
implementing one (10.2%). For 9.1% of participating companies the model has
already been introduced but does not actually work. Only 5.7% of participants
state that they do not plan to introduce competencies in the next 1-2 years.
Some differences in the results between organisations with a functioning
competency model and those of organisations with implemented but not
functioning models are worth noting. The latter share that the process of
introducing the competencies has to a greater extent been hindered by
insufficient understanding by managers regarding the advantages of the model
(50% compared to 28% for organisations with a functioning competency model)
as well as by employee resistance to accepting the model (50% compared to only
9.4%).
Comparing the results of organisations with currently operational competency
models to those of respondents that envisage updates of their models, we note
that the second group has much more frequently been faced with difficulties
in ensuring relevance/applicability to the whole target group (70% compared to
28.1%) and ensuring clarity and user-friendliness (70% against 46.9%). They have
also faced stronger employee resistance to accepting the model (20% compared
to 9.38%) and point out the inability of the current model to meet the needs of
top management as a reason to change existing competencies (40% compared to
15.6%).
Figure 1. At your company, a competency model:
Has already been implemented and is
currently operational
3 6 .4%
17.1%
Is about to be developed
Is planned for revision and update
11.4%
Is in the process of development
10.2%
Has already been implemented and is

currently operational
10.2%
Has been implemented but is not

functioning according to expectations
9.1%
Is not envisaged for implementation in

the next 1-2 years
5.7%
0%
20%
40%
6 0%
80%
100%
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
11
Competency models
It is worth highlighting that of all the sectors covered in the survey, Manufacturing
has the largest number of companies with implemented but not functioning
models (15.4%). For approximately one-third of the organisations in this sector
a competency model is still to be developed (30.8%). Another 15.4% do not
envisage introducing a competency model in the next 1-2 year.
None of the Pharmaceutical companies that took part in the survey has
an implemented and operational competency model. An equal number of
organisations from this sector are either in the process of developing the model or
are planning to revise and update it (33.3%).
In 19% of small companies (with up to 50 employees) the implementation of a
competency model is not envisaged for the next 1-2 years. The percentage of
companies that are in the process of implementing a model is the same.
Similar tendencies can be observed in companies that have recently entered the
Bulgarian market (up to three years). An equally large percentage of them are in
the process of developing a model (28.6%) or do not envisage implementation of
a model for the next 1-2 years (28.6%).
These results support our practical observations that the stages of an
organisations development determine the moment of introducing a competency
model. With the number of employees increasing, the need for clarity and
transparency regarding the standards and criteria for successful performance
becomes even more tangible. In the initial stages of a companys penetration in a
specific market its focus is usually on attracting clients and winning market share.
Figure 2. At your company, a competency model:
Has already
been
implemented
and is currently
operational
Has been
implemented
but is not
functioning
according to
expectations
Is currently
being
designed
Is in the
process of
development
Is about to be
developed
Is planned for
revision and
update
Is not envisaged
for
implementation in
the next 1-2 years
Group
Financial Services
47.37
10.53
10.53
5.26
21.05
Trade (Retail and Wholesale, FMCG)
30.00
5.00
15.00
15.00
10.00
Information Technology, Telecommunications, Media
38.89
11.11
16.67
11.11
16.67
5.56
Energy
40.00
20.00
20.00
20.00
33.33
33.33
Pharmaceuticals
33.33
5.26
15.00
10.00
Public Administration
50.00
10.00
10.00
Manufacturing
23.08
15.38
7.69
30.77
7.69
15.38
Up to 50 employees
38.10
9.52
9.52
4.76
19.05
From 51 to100 employees
45.45
18.18
9.09
From 101 to 500 employees

Above 500 employees
19.05
30.00
18.18
9.09
28.57
9.52
14.29
9.52
19.05
14.29
37.14
11.43
2.86
14.29
20.00
14.29
With international share
39.68
9.52
7.94
11.11
15.87
9.52
Without international share
28.00
8.00
16.00
8.00
20.00
16.00
Up to 3 years presence on the Bulgarian market
14.29
14.29
28.57
14.29
From 3 to 5 years presence on the Bulgarian market
40.00
20.00
20.00
10.00
44.44
5.56
22.22
5.56
11.11
11.11
11 years or more presence on the Bulgarian market
35.85
13.21
7.55
7.55
18.87
13.21
4.76
6.35
4.00
28.57
10.00
3.77
12
Competency models
Boosting effectiveness is the main

reason for introducing a competency
model.
For most of the organisations that took part in the survey the introduction
of a competency model was triggered by the need to increase efficiency
on organisational (68.2%) and personal (52.3%) levels. Almost half of the
respondents aim at supporting the management (44.3%) and increasing employee
engagement (44.3%). For 34.1% the introduction of a competency model resulted
from following instructions from a parent company, whereas 26.1% aimed at
supporting a change process in the company (including mergers).
Figure 3. The introduction of a competency model in the company was/is driven

by the need to:
6 8.2%
Increase organisational efficiency

52.3 %
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited liability company and a member firm of the KPMG
network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
Increase personal efficiency

Increase employee engagement
44.3 %
Support the management
44.3 %
Follow instructions from the

headquarters/ parent company
3 4.1%
Support a change process in the

organisation
26 .1%
2.3 %
Other
0%
20%
40%
6 0%
80%
100%
It should be noted that almost all companies from the ITM sector (88.9%) have
introduced competencies in view of increasing organisational efficiency. In the
Energy sector, the percentage of companies that introduced competencies for the
same reason is again very high (80%). The same percentage marks the need to
support management and increase employee engagement. In the Public sector
the need to support the management can be seen as a primary reason (60%). A
possible reason is the need for legally well-sustained and objective management
decisions.
Figure 4. The introduction of a competency model in the company was/is driven by the need to:
Follow instructions
from the
Headquarters/
mother company
Increase
organisational
efficiency
Increase
personal
efficiency
Support the
management
Increase
employee
engagement
Support a
change process
in the
organisation
Other
Group
Financial Services
42.11
57.89
47.37
21.05
31.58
10.53
40.00
80.00
70.00
50.00
50.00
25.00
33.33
88.89
44.44
44.44
38.89
22.22
Energy
40.00
80.00
60.00
80.00
80.00
60.00
66.67
33.33
33.33
33.33
33.33
Pharmaceuticals
5.26
20.00
40.00
50.00
60.00
40.00
50.00
Manufacturing
30.77
53.85
46.15
46.15
53.85
23.08
Up to 50 employees
33.33
71.43
57.14
47.62
52.38
23.81
36.36
81.82
45.45
45.45
36.36
9.09
23.81
85.71
71.43
42.86
38.10
28.57
Above 500 employees
40.00
51.43
40.00
42.86
45.71
31.43
44.44
69.84
57.14
41.27
39.68
23.81
8.00
64.00
40.00
52.00
56.00
32.00
4.00
28.57
57.14
57.14
57.14
42.86
14.29
14.29
40.00
90.00
50.00
60.00
60.00
10.00
61.11
77.78
55.56
50.00
50.00
33.33
24.53
62.26
50.94
37.74
39.62
28.30
10.00
9.52
1.59
1.89
13
Competency models
14
Competency models
Competency models are widely

applied in different HR management
processes.
Analysis of the survey results shows that competency models are most widely
applied in relation to performance management (75%). Organisations also utilise
competencies for training needs analysis (58%), career development (55.7%),
recruitment (53.4), talent management (40.9%), assessment and development
centres (27.3%) and 360 degree feedback (26.4%).
Figure 5. The competency model in the company is (will be) applied for:
Performance management
75.0%
58.0%
Training needs analysis
55.7%
Career development
53 .4%
Recruitment
40.9%
Talent management
Assessment and development centres
27.3 %
360 degree feedback
26 .4%
2.3 %
Other
0%
20%
40%
6 0%
80%
100%
Survey data reveal some differences in the priority areas for the application of
competency models in the sectors surveyed. All respondents from the Energy
sector (100%) point out that competencies are applied for talent management and
development. Representatives of Public Administration apply competencies to the
greatest extent in career development (70%), whereas manufacturing companies
concentrate on training needs analysis (61.6%). For the remaining sectors the
area most frequently pointed to is performance management.
Figure 6. The competency model in the company is (will be) applied for:
Recruitment
Performance
management
Talent
management
Training
needs
analysis
Career
development
Assessment
and
development
centres
360 degree
feedback
Other
Group
Financial Services
68.42
84.21
42.11
68.42
52.63
21.05
15.79
45.00
85.00
40.00
75.00
60.00
50.00
25.00
55.56
72.22
61.11
27.78
50.00
16.67
38.89
Energy
60.00
80.00
100.00
80.00
80.00
60.00
60.00
Pharmaceuticals
33.33
100.00
60.00
60.00
10.00
50.00
70.00
10.00
10.00
Manufacturing
38.46
53.85
23.08
61.54
53.85
23.08
30.77
Up to 50 employees
47.62
66.67
19.05
33.33
57.14
9.52
23.81
63.64
72.73
18.18
54.55
36.36
9.09
18.18
38.10
80.95
57.14
61.90
57.14
28.57
23.81
Above 500 employees
62.86
77.14
51.43
71.43
60.00
42.86
31.43
52.38
76.19
44.44
58.73
52.38
33.33
31.75
56.00
72.00
32.00
56.00
64.00
12.00
12.00
4.00
42.86
71.43
14.29
28.57
42.86
14.29
14.29
14.29
70.00
100.00
40.00
40.00
50.00
30.00
10.00
44.44
88.89
55.56
44.44
50.00
33.33
27.78
54.72
66.04
39.62
69.81
60.38
26.42
30.19
33.33
20.00
9.52
1.59
1.89
15
Competency models
16
Competency models
In the appraisal/performance management system competencies are in most

cases integrated with personal development goals (83%). Following are business
(63.6%), financial (33%) and goals related to functional change (26.1%).
Figure 7. In the appraisal/performance management system the competency

model is (will be) integrated with:
Personal
development goals
83 .0%
6 3 .6 %
Business goals
3 3 .0%
Financial targets
Goals related to
functional change
26 .1%
1.1%
Other
0%
20%
40%
6 0%
80%
100%
Competency models
17
An interesting fact is that all Pharmaceutical companies (100%) integrate their

competencies with financial goals, which could be related to the specifics of the
business as well as to the stage of the models development. The other sectors
integrate their competencies primarily with personal development goals. A
significant part of the participants from the Public Administration (60%) integrate
their competencies with goals related to functional change. This might be related
to reform in the public sector and the strengthening of the administrative capacity.
Figure 8. In the appraisal/performance management system the competency model is (will be) integrated with:
Business
goals
Personal
development
goals
Goals related to
functional
change
Other
Group
Financial Services
26.32
73.68
100.00
15.79
30.00
75.00
85.00
30.00
38.89
55.56
72.22
22.22
80.00
100.00
40.00
100.00
66.67
66.67
33.33
20.00
40.00
90.00
60.00
Manufacturing
46.15
53.85
61.54
7.69
Up to 50 employees
33.33
66.67
85.71
33.33
54.55
72.73
63.64
27.27
33.33
61.90
76.19
28.57
Above 500 employees
25.71
60.00
91.43
20.00
30.16
63.49
85.71
28.57
40.00
64.00
76.00
20.00
28.57
57.14
71.43
28.57
20.00
80.00
90.00
30.00
27.78
55.56
83.33
33.33
37.74
64.15
83.02
22.64
Energy
Pharmaceuticals
10.00
2.86
4.00
1.89
Financial
targets
18
Competency models
In most organizations, the model

applies to all employees.
Most of the participating organisations (70.9%) apply their competency model

to all employees. For 19.8% of them competencies are used for both managers
and key specialists in the company. A small percentage of respondents apply the
model only to key specialists (4.7%) or to managers (3.5%).
Figure 9. The competency model in your company applies/will apply to:
70.9%
All employees
Managers and
key specialists
19.8%
4.7%
Key specialists
3 .5%
Managers
1.2%
Other
0%
20%
40%
6 0%
80%
100%
19
Only manufacturing companies apply competency models most often to

managers and key specialists. Pharmaceutical companies apply competencies
equally often to all employees (33.3%), to managers only (33.3%) and to both
managers and key specialists (33.3%).
Figure 10. The competency model in your company applies/will apply to:
All employees
Managers and
key specialists
Managers
Key specialists
Other
Group
Financial Services
89.47
5.26
5.26
70.00
20.00
72.22
16.67
Energy
60.00
40.00
Pharmaceuticals
33.33
33.33
90.00
Manufacturing
30.77
46.15
Up to 50 employees
66.67
4.76
81.82
9.09
76.19
23.81
Above 500 employees
62.86
28.57
2.86
2.86
2.86
69.84
19.05
3.17
3.17
1.59
68.00
20.00
42.86
90.00
72.22
27.78
67.92
22.64
10.00
11.11
33.33
10.00
7.69
9.52
9.52
9.09
4.00
8.00
14.29
14.29
10.00
3.77
3.77
1.89
Competency models
20
Competency models
Competency models in most

cases consist of core, specific and
technical competencies which are
presented in detail.
The largest proportion of the surveyed organisations combine core, specific and
technical competencies (29.1%). Similar is the percentage of companies with a
combination of core and specific competencies (25.6%). Core competencies are
only used by 20.9% and specific by only 15.1% of participants.
Figure 11. The model includes (will include):

29.1%
Core, technical and specific competencies
25.6 %
Core and specific competencies
Core (generic) competencies
20.9%
15.1%
Specific competencies
8.1%
Specific and technical competencies

Core and technical competencies
1.2%
0%
20%
40%
6 0%
80%
100%
21
In the Energy sector core competencies for the whole company prevail (60%).
Pharmaceutical companies are focusing on specific competencies, using them
on their own (33%), combining them with core and technical (33%) or just with
technical ones (33%). Respondents from the ITM (33%), Financial Services
(36.8%) and Trade (25%) sectors most often integrate core, technical and specific
competencies. Representatives from the last two sectors just as frequently apply
only core and specific competencies (Financial Services 36.8% and Trade
25%).
Figure 12. The model includes (will include):
Core (generic)
competencies
(for the whole
company)
Core and
specific
competencies
Core and
technical
competencies
Core, technical
and specific
competencies
Specific and
technical
competencies
Specific
competencies
Group
Financial Services
26.32
36.84
20.00
25.00
16.67
27.78
Energy
60.00
36.84
5.00
25.00
5.00
20.00
33.33
5.56
16.67
40.00
Pharmaceuticals
33.33
33.33
33.33
10.00
10.00
20.00
40.00
40.00
30.00
20.00
10.00
21.05
21.05
31.58
10.53
15.79
9.09
18.18
45.45
9.09
18.18
33.33
23.81
23.81
4.76
14.29
Above 500 employees
17.14
31.43
2.86
25.71
8.57
14.29
22.95
26.23
1.64
29.51
6.56
13.11
16.00
24.00
28.00
12.00
20.00
20.00
20.00
40.00
20.00
10.00
30.00
30.00
33.33
22.22
27.78
11.11
5.56
18.87
26.42
28.30
7.55
16.98
20.00
Manufacturing
Up to 50 employees
1.89
30.00
Competency models
22
Competency models
More than half of the organisations (51.1%) have applied a detailed approach
to developing their competencies besides titles and descriptions they include
observable behaviours and levels of demonstration. The same is the percentage
of companies that use titles, descriptions and observable behaviours (21.6%)
and just titles and descriptions (21.6%). Only 3.4% of respondents have their
competencies developed as titles only.
Figure 13. The competencies are (will be) presented as:
Titles and descriptions with observed

behaviours and levels of demonstration
51.1%
Titles and descriptions with observed

behaviours
21.6 %
Titles and descriptions
21.6 %
3 .4%
Titles
0%
20%
40%
6 0%
80%
100%
Competency models
23
The largest percentage of representatives of the Public sector (50%) share that
the competencies are presented with titles and descriptions only, which probably
influences the purely formal attitude towards the model, a challenge mentioned
by participants from that sector. All participants from Pharmaceutical companies
(100%) have competencies developed to the level of observable behaviours.
Companies with shorter-term presence on the Bulgarian market (up to 3 years)
in most cases point out that their competencies are presented as titles and
descriptions (60%).
Data analysis identifies differences in the level of detail to which competency
models have been developed depending on the purpose and application of the
competencies. Only 15.8% of the organisations which have their competencies
presented as titles and descriptions only use the model for talent development.
For comparison purposes, the percentage of organisations with defined
behaviours and levels of demonstration is 57.8%. Similar tendencies can be
observed regarding the applicability of competencies to training needs analysis
(26.3% to 77.8%) and 360 degree feedback (5.26% to 40%). Competency
models developed in detail serve as a sound basis for designing successful talent
development programmes.
Figure 14. The competencies are (will be) presented as:
Titles and
descriptions
Titles
Titles and
descriptions
with observed
behaviours
Titles and
descriptions with
observed
behaviours and
levels of
demonstration
Group
Financial Services
10.53
21.05
31.58
36.84
5.00
30.00
10.00
55.00
11.11
22.22
66.67
Energy
20.00
Pharmaceuticals
80.00
100.00
50.00
10.00
40.00
7.69
23.08
53.85
28.57
23.81
33.33
36.36
36.36
27.27
19.05
23.81
47.62
14.29
14.29
71.43
20.63
22.22
49.21
24.00
20.00
56.00
60.00
10.00
30.00
11.11
22.22
61.11
14.29
42.86
14.29
18.87
20.75
56.60
Manufacturing
Up to 50 employees
4.76

9.52
Above 500 employees

4.76
5.56

3.77
24
Competency models
Nearly half of the respondents (48.9%) have 6-9 competencies, 30.7% above 10
and the rest 18.2% 5 or less.
Figure 15. How many competencies are included in the model?

48.9%
6 to 9
3 0.7%
10 or more
18.2%
5 or less
0%
20%
40%
6 0%
80%
100%
It should be noted that Pharmaceutical companies tend to use a smaller

number of competencies. A larger percentage of them (66.7%) have five or less
competencies. Trade companies rely on 6-9 (40%) and 10 or more competencies
(again 40%). This tendency is valid for participants from the Manufacturing sector
as well (30.1% have 6-9 competencies and another 30.1% 10 or more).
Figure 16. How many competencies are included in the model?
5 or less
6 to 9
10 or more
Group
Financial Services
10.53
57.89
31.58
20.00
40.00
40.00
27.78
44.44
27.78
60.00
40.00
Energy
Pharmaceuticals
66.67
33.33
80.00
20.00
Manufacturing
23.08
30.77
30.77
Up to 50 employees
28.57
38.10
23.81
36.36
36.36
27.27
14.29
61.90
23.81
Above 500 employees
8.57
51.43
40.00
19.05
42.86
34.92
16.00
64.00
20.00
30.00
50.00
20.00
11.11
55.56
33.33
28.57
14.29
28.57
16.98
50.94
32.08
Competency models
Almost half of the organisations that took part in the survey (44.3%) have
developed their competency models by adapting an existing model from their
parent company (the Headquarters). More than one-fourth of the participants
(26.1%) relied on entirely internal resources, 14.8 % on external advisors, and
12.5% of them used a ready model from another organisation.
Figure 17. The development of the competency model in the company was/will be
done:
By adapting an existing model from the
parent company/ headquarters
44.3 %
26 .1%
Entirely with internal resources
With the help of an external advisor
14.8%
By using a model from another company
12.5%
0%
20%
40%
6 0%
80%
100%
Participants choose different

approaches to developing the model.
25
26
Competency models
All representatives from the Pharmaceutical Sector (100%) adapted their

headquarters model. The same approach is most widely used in the Energy
Sector (40%), accompanied by the use of a model from another company (again
40%). Manufacturing companies share that besides a model from their parent
organisation (23.1%), they rely on their internal resources (23.1%), as well as on
external advisors (23.1%). It is possible that the specifics of this sector call for
highly specific competency models, adapted for respective organisations.
Organisations with international participation preferred to adapt their headquarters
model (54%), whereas Bulgarian companies relied on internal resources (44%).
Figure 18. The development of the competency model in the company was/will be done:
Entirely with
internal
resources
By adapting an
existing model
from the parent
company/
headquarters
By using a
model from
another
company
With the help of

an external
advisor
Group
Financial Services
26.32
47.37
5.26
21.05
20.00
50.00
15.00
15.00
38.89
44.44
11.11
5.56
Energy
20.00
40.00
40.00
Pharmaceuticals
100.00
30.00
40.00
10.00
20.00
Manufacturing
23.08
23.08
15.38
23.08
Up to 50 employees
23.81
47.62
14.29
4.76
18.18
45.45
27.27
9.09
33.33
38.10
14.29
14.29
Above 500 employees
25.71
45.71
5.71
22.86
19.05
53.97
12.70
11.11
44.00
20.00
12.00
24.00
20.00
60.00
20.00
33.33
66.67

28.30
42.86
28.57
33.96
13.21
24.53
Competency models
The most frequently mentioned challenge when developing and adapting the
competency model is the achievement of clear alignment between competencies
and the organisations business goals (60.2%). More than half of the participants
(51.1%) were faced with difficulties in achieving clarity and user-friendliness.
Further challenges include achievement of applicability of competencies to all
employees (38.6%), consistency between different competencies and avoiding
overlap of content (37.5%) as well as reflecting corporate values (27.3%).
Figure 19. During the development/adaptation of the competency model we encountered/expect the following challenges in:
Achieving clear alignment between
competencies and business goals
6 0.2%
Ensuring clarity and user-friendliness
51.1%
Achieving relevance/applicability of the

competencies to all employees from the target
group
3 8.6 %
Reaching consistency between the different

competencies and avoiding overlap of content
3 7.5%
27.3 %
Reflecting the corporate values
4.6 %
Other
0%
20%
40%
6 0%
80%
100%
Companies are faced with numerous

challenges when developing and
implementing the competency
models.
27
28
Competency models
All organisations from the Pharmaceutical and Energy sectors as well as most
of the participants from the Financial Services (57.9%) and ITM (55.6%) sectors
point out the achievement of clear alignment between competencies and their
organisations business goals as the most significant challenge. Achieving clarity
and user-friendliness is the most frequently shared difficulty by Trade (60%) and
manufacturing companies (69.2%). Public Administration to a great extent faced
difficulty because of the need to achieve consistency between the different
competencies and avoid overlap of content (90%).
The same difficulty is encountered more often by Bulgarian companies (64%) than
by those with international ownership (27%), which may be due to the fact that in
most cases the latter use complete models from their headquarters.
Figure 20. During the development/adaptation of the competency model we encountered/expect the following challenges in:
Achieving clear
alignment between
competencies and
business goals
Reflecting the
corporate
values
Ensuring clarity
and userfriendliness
Achieving
relevance/applicability of
the competencies to all
employees from the
target group
Reaching consistency
between the different
competencies and
avoiding overlap of
content
Financial Services
57.89
26.32
36.84
15.79
31.58
50.00
30.00
60.00
50.00
25.00
Other
Group
55.56
27.78
38.89
27.78
38.89
Energy
100.00
60.00
40.00
40.00
40.00
Pharmaceuticals
15.79
5.56
100.00
33.33
33.33
66.67
70.00
20.00
70.00
70.00
90.00
Manufacturing
53.85
15.38
69.23
38.46
30.77
Up to 50 employees
61.90
28.57
57.14
33.33
52.38
45.45
27.27
54.55
27.27
18.18
57.14
33.33
42.86
52.38
19.05
Above 500 employees
65.71
22.86
51.43
37.14
45.71
5.71
58.73
28.57
50.79
39.68
26.98
3.17
64.00
24.00
52.00
36.00
64.00
8.00
60.00
40.00
30.00
30.00
20.00
10.00
50.00
27.78
44.44
33.33
33.33
5.56
57.14
28.57
42.86
28.57
42.86
64.15
24.53
58.49
43.40
41.51
9.52
3.77
Competency models
29
The most frequent challenges in the process of implementation are related to

the practical application of the model (53.4%), the purely formal attitude towards
it (46.6%), insufficient understanding by managers about its advantages (34.1%)
and employee resistance to accepting it (20.5%). Only 11.4% of the organisations
have difficulties integrating the model in their HR activities.
Figure 21. During the implementation of the competency model we encountered/

are expecting the following challenges:
Difficulties in the practical application of the
competency model
53 .4%
Formal attitude towards the model
46 .6 %
Insufficient understanding from the

managers about the advantages of the
model
20.5%
Employee resistance to accepting the model
11.4%
Integrating the model in the HR activities
8.0%
Other
0%
20%
40%
6 0%
80%
100%
3 4.1%
30
Competency models
The practical application of the model is most often pointed out as challenging
by representatives from the Financial Services (47.4%), Trade (65%),
Pharmaceuticals (66.7%) and Public Administration (60%). The last group face
equally frequently problems caused by the purely formal attitude toward the
model (60%). Participants from ITM (55.6%), Energy (80%) and Manufacturing
(61.6%) face the same challenge.
Figure 22. During the implementation of the competency model we encountered/are expecting the following challenges:
Insufficient
understanding from
the managers about
the advantages of
the model
Difficulties in the
practical application of
the competency model
Employee
resistance to
accepting the
model
Formal
attitude
towards the
model
Integrating
the model in
the HR
activities
Other
Group
Financial Services
36.84
47.37
0.05
26.32
5.26
35.00
65.00
10.00
35.00
10.00
38.89
44.44
27.78
55.56
16.67
Energy
40.00
60.00
40.00
80.00
40.00
Pharmaceuticals
66.67
33.33
33.33
40.00
60.00
40.00
60.00
10.00
Manufacturing
23.08
46.15
23.08
61.54
7.69
4.76
Up to 50 employees
15.79
16.67
10.00
9.52
61.90
38.10
47.62
18.18
36.36
18.18
36.36
33.33
52.38
14.29
38.10
28.57
Above 500 employees
54.29
54.29
14.29
54.29
8.57
2.86
34.92
47.62
15.87
44.44
9.52
11.11
32.00
68.00
32.00
52.00
16.00
40.00
50.00
27.78
38.89
11.11
55.56
16.67
11.11
42.86
57.14
42.86
14.29
14.29
60.38
22.64
47.17
11.32
5.66

39.62
4.76
27.27
30.00
9.52
10.00
Competency models
A significant number of the surveyed organisations (65.9%) anticipate a need

to change their competencies when their companys strategy changes. Other
reasons include the external economic environment (38.6%) and the inability of
the existing model to meet the needs of top management (23.9%).
Figure 23. The change of competencies in the organisation is due (would be due)
to:
6 5.9%
Change in the companys strategy
3 8.6 %
External economic environment*

Current model not meeting needs of top
management
23 .9%
9.1%
Other
0%
20%
40%
6 0%
80%
100%
*(Including regulatory changes, political changes, macroeconomic indicators)

Change in organisational strategy

usually leads to an update of the
competency model.
31
32
Competency models
All Pharmaceutical companies point out the external economic environment as a

reason for reviewing and updating their competency model, whereas for all other
surveyed sectors a change in company strategy is the most frequent reason.
Figure 24. The change of competencies in the organisation is due (would be due) to:
Change in the
companys
strategy
External economic
environment (regulatory
changes, political changes,
macroeconomic indicators)
Current model
not meeting
needs of top
management
Other
Group
Financial Services
63.16
31.58
26.32
5.26
60.00
30.00
15.00
10.00
61.11
38.89
27.78
16.67
Energy
80.00
40.00
60.00
Pharmaceuticals
66.67
100.00
70.00
40.00
Manufacturing
76.92
46.15
7.69
Up to 50 employees
61.90
47.62
19.05
72.73
54.55
27.27
61.90
42.86
23.81
9.52
Above 500 employees
68.57
25.71
25.71
8.57
65.08
38.10
23.81
7.94
68.00
40.00
24.00
12.00
50.00
30.00
20.00
20.00
77.78
44.44
27.78
42.86
57.14
28.57
14.29
67.92
35.85
22.64
9.43
40.00
20.00
14.29
Competency models
33
Appendix
Participants profile
According to the industry sector in

which the organisations operate,
participants were distributed in seven
groups:
Financial services
Information Technology,
Telecommunications, Media (ITM)
Energy
Pharmaceuticals
Manufacturing
Manufacturing
14.8%
Financial Services
21.6%
11.4%
Pharmaceuticals
3.4%
Energy
5.7%
Trade (Retail and

Wholesale, FMCG)
22.7%
Information
Technology,
Telecommunications,
Media
20.5%
Approximate number of employees
According to the approximate

number of employees working in
the organisation, we have grouped
participants as follows:
Up to 50 employees
23.9%
Above 500
employees
39.8%
Up to 50 employees
From 51 to100
employees
12.5%

Above 500 employees
From 101 to 500
employees
23.9%
Industry sector
34
Competency models
International ownership)
Based on the type of ownership, we

split participants into two groups:
No
28.4%
International ownership
No international ownership
Yes
71.6%
Presence on the Bulgarian market
Up to 3 years
8.0%
In terms of the years of presence

on the Bulgarian market, we divided
participants in the following groups:
From 3 to 5 years
11.4%
Up to 3 years
From 3 to 5 years
From 6 to 10 years
11 years or more
60.2%
From 6 to 10 years
20.5%
11 years or more
kpmg.bg
Contacts
Gergana Mantarkova
Managing Partner
Tel +359 2 9697 500
Fax +359 2 9805 340
gerganamantarkova@kpmg.com
Anna Pavlova
Director, Advisory
People & Change
Tel +359 2 9697 350
Fax +359 2 9805 340
apavlova@kpmg.com
Borislava Loboshka
Manager, Advisory
People & Change
Tel +359 2 9697 350
Fax +359 2 9805 340
bloboshka@kpmg.com
KPMG in Bulgaria
Sofia
45/A Bulgaria Boulevard
Sofia 1404, Bulgaria
Tel +359 2 9697 300
Fax +359 2 9805 340
bg-office@kpmg.com
Varna
3 Sofia Street
Varna 9000, Bulgaria
Tel +359 52 699 650
Fax +359 52 611 502
bg-office@kpmg.com
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavor to provide accurate and
timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.
2010 KPMG Advisory EOOD, a wholly

owned subsidiary of KPMG Bulgaria OOD, a
Bulgarian limited liability company and a
member firm of the KPMG network of
independent member firms affiliated with
KPMG International, a Swiss cooperative. All
rights reserved.

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Competency models

benefits and challenges

About the survey 

KPMGs view on survey results

The results in detail

About the survey

KPMGs view on survey results

To achieve the above-mentioned aims, competency models are integrated into

The introduction and application of a competency model is related to the stages

Almost half of the manufacturing companies still do not have an implemented

The process of developing and implementing a competency model in the

Critical moments in the

The choice of approach determines to a certain extent the critical moments

faced stronger employee resistance to accept the model as well as difficulties in

The present economic situation encourages more and more organisations to

precise definition of the purposes that the organisation aims to achieve by

analysis of the advantages and disadvantages of the possible options and

clear definition of the areas of applicability of the competencies and planning

alignment of competencies with corporate values and the organisations

clear, accessible and unambiguous presentation of the competencies most

integration of the competencies in a unified model, avoiding overlap of their

analysis of the attitudes towards the introduction of a competency model

preparation of a communication plan, messages and initiatives

envisaging employee availability for participation in the process of design and

checking of the relevance/applicability of the competencies to all participants

planning and conducting initiatives related to managers and employees

follow-up on whether the competencies are up-to-date and timely

The results in detail

Is in the process of development

Has already been implemented and is

Has been implemented but is not

Is not envisaged for implementation in

Figure 2. At your company, a competency model:

Trade (Retail and Wholesale, FMCG)

Information Technology, Telecommunications, Media

From 51 to100 employees

From 101 to 500 employees

With international share

Without international share

Up to 3 years presence on the Bulgarian market

From 3 to 5 years presence on the Bulgarian market

From 6 to 10 years presence on the Bulgarian market

11 years or more presence on the Bulgarian market

Boosting effectiveness is the main

Figure 3. The introduction of a competency model in the company was/is driven

Increase organisational efficiency

Increase personal efficiency

Support the management

Follow instructions from the

Support a change process in the

Trade (Retail and Wholesale, FMCG)

Information Technology, Telecommunications, Media

From 51 to100 employees

From 101 to 500 employees

Above 500 employees

With international share

Up to 3 years presence on the Bulgarian market

From 3 to 5 years presence on the Bulgarian market

From 6 to 10 years presence on the Bulgarian market

11 years or more presence on the Bulgarian market

Without international share

Competency models are widely

Training needs analysis

About the survey

KPMGs view on survey results

The results in detail