Competence is the ability of an individual to do a job properly. Generally, competence refers to the ability to perform well. 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 and Company (Currently the “Hay Group”) colleague Richard Boyatzis and many others, such as T.F. Gilbert (1978) who used the concept in relation to performance improvement. Its use varies widely, which leads to considerable misunderstanding.
Business competencies are skills that allocate for victory in the world of business. In the lack of these skills, small-business owners might find the task of establishing and maintaining their businesses harder than it otherwise would be.