Difference Between Performance Evaluation and Competency Evaluation
HR evaluations in an organization are not simply a process of [scoring results], but rather a process of fairly measuring employees' performance and designing growth directions together. Among these, performance evaluation and competency evaluation have different perspectives, but the most balanced evaluation is possible when used together.
1. Performance Evaluation
Performance evaluation is a method that assesses how well employees achieved their goals during a given period, connecting the organization's strategic goals with individual performance for results-oriented evaluation. In flex, you can conduct performance evaluations based on 'Goals' set by employees and organizations!
Characteristics
Quantitative evaluation focus: Metric-based evaluation such as revenue, customer count, project completion rate, etc.
Short-term performance focus: Measures results over specific periods such as monthly, quarterly, or semi-annually
Purpose: Directly linked to compensation systems such as incentives, performance bonuses, and promotions
Example
For example, if the Customer Success team set a goal of 'reducing response time by 15%' and actually achieved 17%, this would be evaluated as exceeding the target.
Advantages and Considerations
Advantage: Fairness and transparency can be ensured as evaluation is possible through metrics.
Consideration: Focusing on short-term performance may overlook qualitative factors such as collaboration and innovative attempts.
2. Competency Evaluation
Competency evaluation assesses what abilities and attitudes employees demonstrated in the process of achieving results. In other words, it is a qualitative evaluation method that focuses on "how results were achieved."
Characteristics
Process-oriented evaluation: Evaluates problem-solving skills, collaboration, communication, leadership, etc.
Growth potential assessment: Identifies not only current performance capabilities but also future growth potential
Purpose: Employee training and development planning, leader identification, etc.
Example
If a team member coordinated differences of opinion among colleagues and resolved issues within the deadline when difficulties arose during a project, that behavior could be evaluated as high 'collaboration' and 'problem-solving' competency.
Advantages and Considerations
Advantage: Can identify employees' long-term growth potential and learning directions.
Consideration: Differences in interpretation among evaluators may occur, so clear criteria and example definitions are needed.
3. Relationship and Application of Both Evaluations
Category | Performance Evaluation | Competency Evaluation |
Evaluation Focus | What was achieved (What) | How it was achieved (How) |
Evaluation Criteria | Quantitative metrics (performance, goal achievement rate, etc.) | Qualitative metrics (behavior, attitude, competencies, etc.) |
Evaluation Purpose | Short-term performance management, compensation linkage | Growth potential diagnosis, development plan creation |
Primary Use | Incentives, promotions, grade calculation | Training, feedback, leader development |
How to manage in flex | Set up and manage goals by employee and organization through the Goals feature, then conduct performance evaluation through the Evaluation feature | Add and manage company competencies through the Competency Management feature, then conduct competency evaluation through the Evaluation feature |
Recommended Competency Evaluation Methods by Company Situation
Since every company has different values and work styles, it's important to design competency evaluations to fit 'our organization's situation and culture'.
You can start with questions like these:
"What should our organization evaluate?"
"Are we performance-oriented or growth-oriented?"
"Are evaluation results linked to compensation, or are they a starting point for growth?"
Based on your answers, find the type closest to your organization among the four types below!
Here are recommended competency evaluation methods suited to each organization's characteristics!
1. Organizations Without Established Evaluation Criteria
When evaluation criteria are unclear, employees easily develop distrust thinking "I don't know what criteria I'm being evaluated on."
In this case, we recommend starting with 'job-based competency evaluation.'
Recommended Method: Job Core Competency-Based Evaluation
Evaluate based on competencies required for job performance (problem-solving, collaboration, customer response, etc.)
Define "what kind of person does well in our organization?" and set competency items accordingly
Operate as a multi-rater evaluation including perspectives from team leaders, colleagues, and collaborating departments
Expected Benefits: Clarity and consistency of evaluation criteria can be secured, and employee trust in evaluations increases.
2. KPI-Driven Performance-Oriented Organizations
If your company has clearly quantifiable performance, it's easy to operate primarily with performance evaluation. However, performance alone makes it difficult to maintain long-term growth and a collaborative culture.
Recommended Method: Performance Evaluation + Behavioral Competency Evaluation Combined
Example: 70% quantitative metric-based performance evaluation + 30% common competencies (collaboration, problem-solving, communication, etc.)
Reflect both the degree of performance achievement and 'the process of achieving results'
Set grade ranges by job function if needed to strengthen evaluation consistency
Expected Benefits: Short-term goal achievement and talent development can be managed simultaneously, and competition fatigue and turnover risk common in performance-driven companies can be mitigated.
3. Organizations Where Performance is Hard to Define Numerically
For planning, design, R&D, and similar roles, the process and creative contribution may be more important than results. For such companies, we recommend a qualitative evaluation-centered feedback structure rather than quantitative evaluation.
Recommended Method: Competency Evaluation + Descriptive Feedback Combined
Define core competencies by job function such as creativity, problem-solving, and execution
Managers or colleagues provide descriptive feedback on strengths and areas for improvement
Specifically document achievements and attitudes that are difficult to convert to numbers
Expected Benefits: Evaluation functions as a 'growth conversation' rather than simple scoring, strengthening a collaboration-centered culture and continuous learning atmosphere.
4. Organizations Newly Introducing an Evaluation System
If your company is starting evaluations for the first time, building trust with a simple and clear structure should be prioritized over complex metrics.
Recommended Method: Basic Competency Evaluation + Self-Reflection Centered Feedback
Select only 3-4 core job competencies and start with a simple evaluation structure
Employees write self-evaluations, and team leaders provide comments based on them
Focus on growth feedback rather than evaluation results
Expected Benefits: Resistance to the evaluation system can be reduced, and a positive perception that [evaluation = starting point for growth] can be spread.
By adjusting the focus of competency evaluation according to the company's maturity and evaluation purpose, the evaluation system can function as a [growth engine for the company] rather than just grade calculation!