Developing performance-linked competency model: a tool for competitive advantage

Purpose – The aims of the article are to not only review existing competency models and offer a comprehensive performance-linked competency model towards sustaining competitive advantage, but also validate the proposed model in an Indian textile organisation. Design/methodology/approach – The article operationalises the term “competency” and intends to develop a comprehensive performance-linked competency model after analysing the existing models with respect to competitive advantage; and the model has been validated empirically in an Indian textile company using data envelopment analysis (DEA), cross-efficiency DEA, and rank order centroid (ROC) methods. Findings – It reveals that the comprehensive performance-linked competency model focuses on competency identification, competency scoring and aligning competency with other strategic HR functions in a three-phase systematic method which will subsequently help the organisation to sustain in the competition. It has further been shown how using DEA, cross-efficiency DEA and ROC, an organisation can align individual performances and their competencies in terms of efficiency. Research limitations/implications – If the number of competencies get increased, DEA cannot be used. Practical implications – This can be applied to industry for more efficient and effective performance measurement tool. Originality/value – The paper enables organizations to systematically manage their employee competences to ensure high-performance level and competitive advantage.