Performance Review and Competency Assessment: How They Fit Together

By Donna Wright, MS, RN, Consultant, Creative Health Care Management

Performance appraisal and competency assessment fall into the same basic family, but they also have some differences. Performance appraisal often refers to the overall employee evaluation. Competency assessment is the component of a performance appraisal that evaluates the current competencies required for the job. Performance appraisal and competency assessment may or may not be linked in the same paper/automation tracking system, but they are both part of the employee evaluation process in its fundamental concepts. 

Here are a few basic guidelines around how the timing of each evaluation system should be handled: 

• Performance appraisals can be done on an annual date (cyclical basis) for all employees or on anniversary dates for each employee throughout the year. 

Some organizations do performance appraisals on the anniversary of hire for each employee. Other organizations select a date that all employees will have their performance appraisals. The overall purpose of performance appraisal time is to formally have a chance where supervisor and employee can have a discussion. During this time the supervisor and employee review the year and overall performance of the individual, as well as set goals for the next year. This meeting is NOT the only time you evaluate the employee. That is actually being done throughout the year. If there is a performance issue on any day of work, a supervisor will address it at the time rather than waiting months to bring up the issue.  

• Competency assessments should only be done on a cyclical basis. 

Because competency assessment reflects the ever-changing nature of the job, competency assessment is communicating the latest expectations of skill required in the job functions. Therefore each employee needs to have the same time frame to accomplish this development or advancement of the new requirements or changes in knowledge or skill. If you used anniversary dates, employees would have different time frames within which to complete the required competencies. Legally, that would be viewed as not providing employees with equal opportunities in the job. 

For example, if one of the new competencies for this year is that all employees of a certain job category need to know how to operate a new piece of equipment, each employee must learn how to use it and verify their competency of its use. If you use anniversary dates, then some employees may only have a few week to achieve and show competence, and other employees would have 8 – 9 months to do the same expectation around this competency. Therefore in the same job category, you would have different expectations for employees. That would be viewed as an unfair employment practice and should be avoided. 

One aspect of competency assessment is articulating what is new and changing in the job. Then the second part of competency assessment is verifying those expectations. By doing competency assessment on a cyclical basis, every employee is given the same time to complete the competency assessment. 

Competency assessment and performance appraisal can be done together as one system or they can each be done separately in two tracking processes. Either is OK; just know the purpose and rationale your organization has for each and how you will use this information in overall employee evaluation. This will help keep your system strong and healthy for all employees and the organization. 

A staff development specialist known for her irreverent wit, Donna brings a global perspective to her work. In this country and in the over two dozen others, Donna’s best known for the work she does based on two of her books, The Ultimate Guide to Competency Assessment and Relationship-Based Care (co-authored with several Creative Health Care Management colleagues). The Ultimate Guide has become the industry standard for HR departments in establishing and assessing competency, and Donna specializes in setting up systems for organizations to ensure accountability and measure competency. Contact Donna at dwright@chcm.com.