The SHRM Competency Model is a roadmap that outlines the knowledge, skills, and behaviors necessary for HR professionals to succeed in their roles. It was developed by SHRM, the world’s largest HR professional society, and serves as a foundational guide for HR practitioners, organizations, and academic programs. The model is designed to help HR professionals navigate the complex challenges of their field and contribute strategically to their organizations.
Key principles and components of the SHRM Competency Model include:
Competency-Based Approach: The model is built on the concept of competencies, which are a combination of knowledge, skills, abilities, and other personal characteristics that lead to effective job performance. HR professionals are expected to demonstrate these competencies in their roles.
Behavioral Anchors: Each competency in the model is accompanied by behavioral anchors that describe observable behaviors or actions that illustrate proficiency at different levels. These anchors help individuals assess their own competency levels and set development goals.
Global Applicability: The SHRM Competency Model is designed to be globally relevant, recognizing that HR professionals operate in diverse cultural and organizational contexts.
Evolution and Adaptability: The model acknowledges that the HR field is dynamic and continually evolving. HR professionals should possess the adaptability and learning mindset to stay current and effective.
The SHRM Competency Model consists of three key domains, each containing multiple competencies. These domains represent the areas of expertise that HR professionals should cultivate:
1. Leadership and Navigation:
Ethical Practice: HR professionals in this domain are expected to demonstrate ethical behavior and uphold the highest standards of integrity and honesty in their HR practices.
Business Acumen: This competency involves understanding and applying business principles and practices to HR management. HR professionals should be able to align HR strategies with organizational goals and contribute to the achievement of business objectives.
Consultation: HR professionals with strong consultation skills can provide expert advice and guidance to both employees and senior leadership on HR matters.
Critical Evaluation: This competency involves the ability to assess HR programs and practices objectively, using data and evidence to inform decision-making and continuous improvement.
Global and Cultural Effectiveness: In an increasingly globalized world, HR professionals should be able to work effectively in diverse cultural and international settings.
2. Interpersonal:
Communication: Effective communication is crucial for HR professionals to convey information, ideas, and policies clearly and persuasively.
Relationship Management: Building and maintaining positive relationships with employees, colleagues, and stakeholders is essential for HR professionals.
Ethical Practice: HR professionals should demonstrate ethical behavior and promote ethical standards within their organizations.
Global and Cultural Effectiveness: This competency extends to interpersonal skills, where HR professionals need to navigate cultural differences sensitively and effectively.
Leadership and Navigation: Leadership skills play a role in interpersonal interactions, particularly when HR professionals need to influence and lead without formal authority.
3. HR Expertise (Technical Knowledge and Application):
People:
HR Strategic Planning: HR professionals should be able to develop and implement HR strategies that align with organizational goals.
Talent Acquisition and Retention: Recruiting, selecting, and retaining top talent is a key responsibility of HR professionals.
Employee Engagement: This competency involves strategies to enhance employee morale, motivation, and job satisfaction.
Learning and Development: HR professionals should support and facilitate employee learning and development programs.
Organization:
Organization Structure: Understanding how organizations are structured and operate is critical for HR professionals.
Workforce Management: Effective workforce planning and management are essential to meet organizational needs.
Employee and Labor Relations: HR professionals should be skilled in managing employee and labor relations effectively.
Technology and Data: Leveraging technology and data for HR decision-making is a key competency.
Workplace:
HR Compliance and Risk Management: Ensuring compliance with laws and regulations and managing HR-related risks are critical.
Diversity and Inclusion: HR professionals should promote diversity and inclusion within their organizations.
Employee Benefits: Managing employee benefits and compensation programs is a significant responsibility.
Practical Applications of the SHRM Competency Model
The SHRM Competency Model has several practical applications for HR professionals and organizations:
1. Professional Development:
HR professionals can use the model to assess their own competencies and identify areas for development. It serves as a roadmap for career growth and advancement.
2. Recruitment and Selection:
Organizations can use the model to identify the competencies and skills they seek in HR candidates during the recruitment and selection process.
3. Performance Management:
The model can inform performance management processes, helping HR professionals set clear expectations and development goals for their teams.
4. Training and Development:
HR departments can design training and development programs aligned with the competencies outlined in the model.
5. Succession Planning:
Organizations can use the model to identify high-potential HR professionals and groom them for leadership roles.
6. Strategic HR Planning:
HR leaders can use the model to align HR strategies with overall business objectives and contribute to organizational success.
Challenges and Considerations
While the SHRM Competency Model provides a valuable framework for HR professionals and organizations, there are challenges and considerations to keep in mind:
1. Continuous Learning:
Staying current with evolving HR practices and competencies requires a commitment to continuous learning and development.
2. Adaptability:
HR professionals must be adaptable to apply the model’s competencies effectively in diverse organizational contexts and changing business landscapes.
3. Customization:
Organizations should customize the model to align with their unique business strategies and industry-specific requirements.
4. Integration:
Integrating the competencies into everyday HR practices and decision-making can be challenging and requires ongoing effort.
5. Data-Driven HR:
The model emphasizes the importance of data and analytics in HR decision-making, requiring HR professionals to develop proficiency in this area.
Conclusion
The SHRM Competency Model serves as a comprehensive blueprint for effective human resource management. By cultivating the competencies outlined in the model, HR professionals can excel in their roles and contribute strategically to their organizations. In an era where attracting, developing, and retaining top talent is a critical business imperative, the SHRM Competency Model provides the guidance and framework needed for HR professionals to thrive in their careers and drive organizational success.
In a functional organizational structure, groups and teams are organized based on function. Therefore, this organization follows a top-down structure, where most decision flows from top management to bottom. Thus, the bottom of the organization mostly follows the strategy detailed by the top of the organization.
In a flat organizational structure, there is little to no middle management between employees and executives. Therefore it reduces the space between employees and executives to enable an effective communication flow within the organization, thus being faster and leaner.
Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.
Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.
The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.
The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.
The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.
Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.
The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.
The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Costco has a matrix organizational structure, which can simply be defined as any structure that combines two or more different types. In this case, a predominant functional structure exists with a more secondary divisional structure.
Costco’s geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
Compared to competitor Walmart, for example, Costco takes more a decentralized approach to management, decision-making, and autonomy. This allows the company’s stores and divisions to more flexibly respond to local market conditions.
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
Goldman Sachs has a hierarchical structure with a clear chain of command and defined career advancement process. The structure is also underpinned by business-type divisions and function-based groups.
Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.
McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.
Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.
Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
