Competence is the ability of an individual to do a job properly. A competency is a set of defined behaviors that provide a structured guide enabling the identification, evaluation and development of the behaviors in individual employees. The term “competence” first appeared in an article authored by R.W. White in 1959 as a concept for performance motivation. Later, in 1970, Craig C. Lundberg defined the concept in “Planning the Executive Development Program”. The term gained traction when in 1973, David McClelland, Ph.D. wrote a seminal paper entitled, “Testing for Competence Rather Than for Intelligence”. It has since been popularized by one-time fellow McBer & Company (Currently the “Hay Group”) colleague Richard Boyatzis and many others, such as T.F. Gilbert (1978) who used the concept in relationship to performance improvement. Its use varies widely, which leads to considerable misunderstanding. Some scholars see “competence” as a combination of practical and theoretical knowledge, cognitive skills, behavior and values used to improve performance; or as the state or quality of being adequately or well qualified, having the ability to perform a specific role. For instance, life, management competency might include systems thinking and emotional intelligence, and skills in influence and negotiation. Competency is also used as a more general description of the requirements of human beings in organizations and communities. Competency is sometimes thought of as being shown in action in a situation and context that might be different the next time a person has to act. In emergencies, competent people may react to a situation following behaviors they have previously found to succeed. To be competent a person would need to be able to interpret the situation in the context and to have a repertoire of possible actions to take and have trained in the possible actions in the repertoire, if this is relevant. Regardless of training, competency would grow through experience and the extent of an individual to learn and adapt. Competency has different meanings, and continues to remain one of the most diffuse terms in the management development sector, and the organizational and occupational literature. Competencies are also what people need to be successful in their jobs. Job competencies are not the same as job task. Competencies include all the related knowledge, skills, abilities, and attributes that form a person’s job. This set of context-specific qualities is correlated with superior job performance and can be used as a standard against which to measure job performance as well as to develop, recruit, and hire employees. Competencies and competency models may be applicable to all employees in an organization or they may be position specific. Identifying employee competencies can contribute to improved organizational performance. They are most effective if they meet several critical standards, including linkage to, and leverage within an organization’s human resource system Core competencies differentiate an organization from its competition and create a company’s competitive advantage in the marketplace. An organizational core competency is its strategic strength. Competencies provide organizations with a way to define in behavioral terms what it is that people need to do to produce the results that the organization desires, in a way that is in keep with its culture. By having competencies defined in the organization, it allows employees to know what they need to be productive. When properly defined, competencies, allows organizations to evaluate the extent to which behaviors employees are demonstrating and where they may be lacking. For competencies where employees are lacking, they can learn. This will allow organizations to know potentially what resources they may need to help the employee develop and learn those competencies. Competencies can distinguish and differentiate your organization from your competitors. While two organizations may be alike in financial results, the way in which the results were achieve could be different based on the competencies that fit their particular strategy and organizational culture. Lastly, competencies can provide a structured model that can be used to integrate management practices throughout the organization. Competencies that align their recruiting, performance management, training and development and reward practices to reinforce key behaviors that the organization values.