Performance Management, Productivity

Everything you need to know about a Competency Matrix

By on March 25, 2023

The competency matrix is a valued tool used for internal and external profiling. It provides excellent insight into the strengths and weaknesses of an employee, a team, or an entire organization. A competency matrix can be applied to anything from personnel selection, team building, and business strategy. 

In this blog, we will explore everything you need to know about a competency matrix, including its components, benefits, and how it is developed and used. Whether you are a manager looking to improve employee performance or an employee looking to advance your career, a competency matrix can be a valuable tool for achieving your goals.

What is a Competency Matrix?

A competency matrix is a tool that organizations use to identify, assess, and develop the capabilities of their employees. It is a structured approach to evaluating employee skills, abilities, and knowledge to determine the overall competence of an individual. The matrix is the center of a skill management framework as the foundation for managers and business owners.

The matrix is typically organized into a grid that defines different competencies, such as technical skills, problem-solving ability, communication, creativity, leadership etc. Each competency is further broken down into sub-competencies, such as specific technical skills or communication styles.

Are the competency matrix and the skill matrix the same thing?

A skills matrix and a competency matrix are similar but not interchangeable. Although both serve as frameworks for analyzing employee skill sets, identifying skill gaps, and establishing clear job expectations, a competency matrix is a more comprehensive tool that assesses employee knowledge and abilities. This leads to more targeted training and development programs and improved employee engagement. Competencies refer to skills that can strategically benefit a business. They provide an overview of an individual’s ability to apply a specific skill or a group of skills validly. 

For example:

  • Competence in using Python
  • Competence in front-end language skills
  • Competence in project management
  • Competence in data analysis and visualization
  • Competence in communication and collaboration
  • Competence in problem-solving
  • Competence in leadership and team management
  • Competence in customer service

Components of a competency matrix

Every manager may have their style of presenting a competency matrix. However, at its core, a competency matrix is composed of four key elements:

Components of a Competency Matrix

Competency framework: Describes the competencies that are necessary for successful job performance. 

The competency framework serves as a guide for managers and employees to help identify the skills and knowledge required for successful job performance and to develop targeted training programs to improve employee competencies. It includes employees’ knowledge, skills, and abilities to perform their roles effectively. The framework typically consists of a list of core competencies required for all employees within the organization, as well as job-specific competencies specific to particular roles. 

Job-specific competencies: are specific to a particular job and typically derived from the competency framework.

Job-specific competencies are developed by analyzing the specific requirements of each job role and identifying the skills and knowledge necessary for successful job performance. These competencies include technical skills, industry-specific knowledge, clear communication, or leadership styles required for a particular job. By identifying job-specific competencies and assessing employee proficiency levels against these competencies, organizations can ensure that employees have the skills and knowledge needed to perform their roles effectively.

Performance evaluation system: used to assess individual performance, typically includes feedback from supervisors and employees.

The system is designed to clearly understand an employee’s strengths and weaknesses and identify areas for improvement. The evaluation system may include regular check-ins between supervisors and employees, formal performance reviews, and 360-degree feedback. The performance evaluation results are used to guide the development of targeted training programs and to set performance expectations for employees. 

Development plan: a clear roadmap outlining the steps an employee needs to improve their performance

The plan is typically developed based on the performance evaluation results and the identified training and development needs. The plan may include specific goals, such as completing a training program, attending a conference, or completing a certification. It may also have particular timelines for achieving these goals and a plan for measuring progress. 

Why is a competency matrix important?

According to LinkedIn’s 2023 Workplace Learning Report, the top 4 focus areas of Learning and Development (L&D) for 2023 are:

  • Aligning learning programs to business goals
  • Upskilling employees
  • Creating a culture of learning
  • Improving employee retention

Organizational goals are toward competency building, precisely skill development. The competency matrix is the foundation for all learning and development activities of an organization. To build a culture of learning, one must know what needs to be taught.

Identifying competencies and knowledge gaps

A competency matrix is a more comprehensive tool than a skills matrix as it identifies employee skills and assesses employee knowledge and abilities. By assessing employee competencies, organizations can identify areas where employees need additional support and development to perform their roles effectively. This can include providing targeted training programs, mentoring and coaching programs, or other initiatives designed to build the competencies and skills required for success. This leads to more targeted and effective training and development programs for employees. 

Upskilling and reskilling

With the rapid pace of technological advancements, it is essential for employees to continuously update their skills and knowledge to remain relevant in their roles. After the gap analysis, organizations can address the competency gaps, specifically towards skill development. By focusing on upskilling and reskilling, organizations can ensure that their employees have the skills and knowledge required to perform their roles effectively and remain competitive.

Employee retention

An effective competency matrix can lead to better employee engagement and job satisfaction, as employees feel supported and empowered to excel in their roles. It can also lead to improved organizational performance, as employees are better equipped to meet the challenges of their roles and contribute to the organization’s success.

Task assigning

By understanding the skills and knowledge required for each role within the organization, managers can assign tasks to employees based on their competencies. This ensures that employees work on tasks that align with their strengths and knowledge areas. At the same time, managers can identify areas where employees may need additional support or development. 

Succession planning

Succession planning is integral to talent management and involves identifying potential leaders with the competencies and skills required for higher-level roles within the organization. This involves conducting a skills assessment, talent review, and/or another assessment process to identify employees with the potential to take on higher-level roles. Organizations must then provide targeted training to ensure these potential leaders are prepared for new challenges and responsibilities.

Progress monitoring

Progress monitoring involves tracking and measuring employee progress against goals and objectives through check-ins, performance reviews, and feedback sessions – an essential part of talent management and employee development. It helps to identify areas that need additional support, ensure that employees meet performance expectations, and improve employee engagement and job satisfaction, resulting in enhanced organizational success.

Client satisfaction

By identifying the competencies required for successful client interactions, organizations can provide targeted training programs to ensure employees have the necessary skills and knowledge to meet client needs. This can include effective communication, problem-solving, and customer service skills training. By improving employee competencies in these areas, organizations can ensure that they provide high-quality services to their clients, leading to increased client satisfaction and loyalty.

How is a Competency Matrix developed?

Steps to Develop a Competency Matrix

Step 1: Identify the roles and levels within the organization

The first step in developing a competency matrix is identifying the organization’s roles and levels. This is done by analyzing the organizational structure, identifying job roles, and mapping out the hierarchies.

Step 2: Identify the skills and knowledge required for each role

The next step is to identify the skills and knowledge required for each role within the organization. This is done by analyzing the job descriptions and identifying the key competencies needed for each role.

Step 3: Define the proficiency levels

The next step is to define the proficiency levels required for each skill or knowledge area. This is done by defining proficiency levels, such as beginner, intermediate, and expert.

Step 4: Assess the proficiency levels of employees

The final step is to assess employees’ proficiency levels against the required skills and knowledge for their roles. This is done by conducting assessments, such as tests or interviews, to evaluate the level of proficiency of the employees. The results are then recorded in the competency matrix. 


In conclusion, a competency matrix is an effective tool for evaluating, developing, and hiring employees with the required competencies to succeed in their roles. It helps identify skills and knowledge gaps within the organization and plans training and development programs to improve employee competencies. For job seekers, understanding the competencies required for a particular role can help them identify the skills and knowledge they need to develop to become more attractive to an employer. It is worth noting that many training programs focus on creating only one or two core employee attributes. At the same time, a competency matrix provides a comprehensive approach to evaluating and developing employee competencies across various areas.

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