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There are many bottom-line benefits of a competency-based HR system. Employee motivation leads to increased productivity and higher profits. But the real values of an integrated human resource system are more complex–and more powerful. Focusing on competencies will renew your company. You’ll uncover startling energies and synergies that can give you the responsive, competitive edge you need. Here’s what you can expect:

Enhanced Management: With corporate goals clearly defined and a system of employee rewards in place that supports those goals, managers feel empowered. They communicate more effectively with subordinates and with each other. Work proceeds more efficiently. Quality measures go up.

Motivated and Committed Employees: By involving employees in building your new competency-based system, you ensure their early engagement with it. And because the new system rewards employees for overcoming real, daily challenges, workers develop a sense of appreciation and commitment. Less time is lost to wasteful activities. Employees put creative energy into completing their tasks.

Increased Organization Effectiveness: As all levels of your organization align with company goals, overall effectiveness increases dramatically. And the focus on adding and refining key competencies augments this increase continuously. Individual employees become more effective and, as a whole, your company becomes more dynamic, more competent.

Easier Cultural Change and Organizational Improvement: 
A competency-based, integrated human resource system supports your company’s strategic direction. Necessary change becomes simpler when both management and employee goals are defined in terms of the company’s success. With little incentive to cling to older methods or attitudes, both management and employees participate more willingly when change is necessary.

Increased Resilience to Market Pressures: Your company responds to outside stresses not as threats but as challenges. At every level, the goal is not individual survival but group adaptation. By linking employee well-being to corporate health, you tap the creativity and motivation you need to stay competitive.

Cost Savings and Increased Productivity: An integrated human resource system cuts redundancy and waste. It gives overlapping and competing departments incentive to cooperate and coordinate their work. Individual employees see that they benefit by finding more efficient, effective ways to do their work. Less time and material are wasted. Productivity goes up.

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Editor’s Note: This post was originally published in September, 2012 and has been updated for accuracy and comprehensiveness.

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