Over 40 years have passed since David McClelland first proposed that the most sensible approach for predicting future job performance is to focus on "competence" rather than intelligence. This critique of the IQ movement was based on a well-established fact, namely that past performance is the best predictor of future performance. If you want to know how well someone will drive a bus, McClelland reasoned, then make that person drive a bus -- don't give them an IQ test.
Although this idea kick-started the modern competency movement, prompting HR professionals around the world to develop competency-based job descriptions ("good interpersonal skills and the ability to work independently are essential for this role") and interviews ("tell us about a situation where you demonstrated good judgment"), McClelland's original arguments are not as relevant in today's world of work, and there are three main reasons for this.
First, in their quest for predicting future performance, employers are often forced to evaluate potential rather than talent. In other words, if you are interested in spotting talent before anybody else can see it, then you need to be good at measuring a person's ability to develop talent in the future. This is particularly important when evaluating the competence of junior or inexperienced candidates. Indeed, even in competitive settings, such as graduate recruitment programs including Ivy League students, candidates will be fairly homogeneous in terms of their credentials (e.g., similar grades, internships, schools, etc.). As a result, past performance is not so much a predictor of future performance, but an exclusion criterion, and employers are still left with the challenge of differentiating between their highly qualified, but inexperienced, candidates.
Second, although we live in a knowledge economy, organizations no longer pay a premium for what employees already know, but rather, for what they are capable of knowing. Their talent acquisition efforts, at least when it comes to the most innovative and exciting positions, are focused on people's ability to find rather than solve problems -- to use Google's phrase, "hire learning animals." So much so, that job descriptions have become a trivial formality. The reality is that given the rapidly-changing landscape of work at the top of the intellectual pyramid, the key challenge for HR professionals is to hire people who are extremely good at jobs that have not yet been specified -- because the future is less predictable.
Third, the most useful way to think about competencies is in terms of stable dispositions. The only alternative is to discuss transient abilities or skills that may or not be displayed in critical situations. Who cares how funny you are in the company of your best friends, or how polite you are with your preferred clients? I want to know what your average sense of humor and politeness levels are. Indeed, what matters most to businesses is whether their workforce will display these critical talent catalyst most of the time, and particularly when it really matters. Therefore, the most important piece of information organizations need if they are hoping to win the war for talent is a comprehensive personality profile of their employees. It is at this broader, deeper, and universal level that one can make robust generalizations about a person's capabilities and competencies. And the main advantage of this approach is that it can be used to predict any work-related outcome: specific technical jobs, managerial performance, leadership effectiveness, unethical behaviors, etc.
Thus competencies are still alive and they are likely to remain with us for some time. But our approach to evaluating them has changed, because the old methods are useful only vis-à-vis clearly defined, traditional, and predictable jobs. Discussing competencies at the most generic level of analyses, namely personality, is what independent scientists in mainstream organizational psychology have been doing for the past three decades. And this approach represents the most reliable and valid method for predicting future job performance. It is only through this deeper understanding of people that organizations will be able to leverage their human capital and unleash people's true potential at work. So, if competencies are still alive, it is because of personality, the scientific branch of psychology that has advanced our ability to understand and predict what people do at work (and in every area of life).