As discussed in the Manager’s Notebook, “Competencies in a Global Workplace,” competencies can come from a variety of sources, including the job, the strategic direction of the organization, and the global nature of the business. Whatever the source, once competencies are identified, they typically become the key aspects measured in a performance appraisal system. For example, a competency for a salesperson’s job would likely include customer service. The formal performance appraisal for this job might then include a customer service dimension and include, for example, behavioral standards, such as “salesperson greets customer” and “salesperson helps resolve customer complaints,” on which salespeople are evaluated. In short, competencies become the criteria by which performance is measured.

Competencies should reflect what workers do on the job. For example, a job might include dealing with customers, putting together customer products, and expediting orders. Competencies associated with this type of job might include interpersonal skills, negotiation ability, problem solving, and organization skills. These competencies could then be illustrated and measured with observable reflections of these competencies, such as behaviors.

Competencies can reflect more than the core tasks that make up a job. As presented in the Manager’s Notebook, “Competencies in a Global Workplace,” competencies can be based on the strategic direction of an organization. For example, a manufacturing organization might commit to a strategy of customer service in order to have a competitive advantage in its industry. Engaging in customer service isn’t how the company currently operates, and it isn’t reflected in its current manufacturing jobs. However, customer service is a strategic target for the company. If it is going to reach this strategic target, customer service needs to be included as a competency and become part of how jobs are performed in the company.

Competencies can also reflect the global nature of business. The ability to recognize and deal with diverse values and cultures can be critical in today’s global environment. Global businesses routinely confront diversity in culture and language. However, increases in minority and immigrant populations are forcing local organizations to adapt to culturally and linguistically diverse groups. Cultural competency is increasingly being recognized as an important capacity. Cultural competency means that you not only have knowledge of a culture, but that you also have the skills needed to work with that particular ethnic group and the attitude to do so effectively.

Many organizations would benefit from improvements in their cultural competency. Teamwork and productivity suffer if a diverse workforce lacks cultural competency. Further, a lack of cultural competency could negatively affect service and sales to customers.