1 Competency models

benefits and challenges

ADVISORY SERVICES
Competency models
benefits and challenges
Insights from 2010 survey on
practical application in Bulgaria
Content
Introduction 4
About the survey 5
KPMGs view on survey results 6
The results in detail 10
Appendix 33
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
4 Competency models
benefits and challenges
Introduction
We all witness and actively participate in the changes in the economic
environment and their impact on the way we work. Faced with a variety of
challenges, companies are looking for more ways to optimise business processes
and costs, and increase individual as well as organisational efficiency.
Encouraged by the growing interest towards the topic of efficiency we at
KPMGs People & Change Advisory practice endeavoured to carry out a survey
on one of the methods for increasing personal and organizational efficiency the
competency models.
We will take a brief look at what competencies are and how they support the
achievement of high business results.
The term competency was introduced to the Human Resources management in
the early 80s of the 20th century. In 1982 the American scholar Richard Boyatzis
wrote his book The Competent Manager: A Model for Effective Performance,
which exerted serious influence among human resources management
specialists. For over three decades now, competencies and competency models
have become an inseparable part of Human Resources management and have
been widely used as means for increasing personal and organisational efficiency.
As the terms competence and competency were gaining popularity in the
80s and 90s, a semantic differentiation between them was needed, namely
to use competency to denote specific behaviours and skills an employee
should possess in order to be able to achieve high performance levels, and
competence to refer to a level of specific knowledge and skills necessary
to carry out a task. With time a strong tendency has been imposed for
interchangeability of the two terms in both English and Bulgarian.
In this paper we use the term competency to denote a combination of experience,
knowledge, skills and the attitudes necessary for the successful performance of
a specific task or in a specific position. These can be developed through various
forms of learning, both at the workplace and in everyday life.
To support organisations in identifying and attracting suitable employees
and in acquiring the skills and behaviours necessary for the achievement of
business results, HR specialists develop integrated systems of complementary
competencies competency models.
Competency models are widely applicable in Human Resources management
processes for instance in recruitment and selection, learning and development,
career planning. The benefits from using them include employees having a clear
understanding about the behaviours and attitudes encouraged in the organisation,
transparency and fairness of the performance management and talent
identification and development processes.
Despite the indisputable benefits of the competency models, the development
and implementation process is long and complicated and accompanied by a variety
of challenges to be overcome.
That is why we decided to invite different organisations in Bulgaria to share their
experience with competency models and the challenges they face.
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
5 Competency models
benefits and challenges
About the survey
For the purposes of the survey on competency models we at KPMG designed a
questionnaire. It consisted of 12 statements focused on areas of application and
the process of designing and implementing competency models.
For each statement participants were asked to choose between a set of
predefined answers. For most, respondents had the opportunity to select more
than one option. For seven of the statements an additional response could be
provided.
Eighty-eight organisations from different industry sectors (Financial services,
Trade, Information Technology, Telecommunications, Media (ITM), Energy,
Pharmaceuticals, Public Administration and Manufacturing) took part in the survey
on competency models.
In order to identify some tendencies and differences, we have also split the
participants into different groups according to approximate number of employees
(Up to 50 employees, From 51 to 100 employees, From 101 to 500 employees
and Above 500 employees), type of ownership (International and Bulgarian) and
presence on the Bulgarian market (Up to 3 years, From 3 to 5 years, From 6 to 10
years and 11 years or more). A detailed profile of the participants is presented in
the Appendix.
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
6 Competency models
benefits and challenges
KPMGs view on survey results
Our survey shows that most organisations take into consideration the need for a
competency model that supports corporate strategy and values, translating them
into common and comprehensive criteria for successfully performing activities in
a company. Introducing such a system is in most cases was triggered by the need
to increase personal and, resulting from that, organizational efficiency. Almost half
of the respondents aim at strengthening employee commitment. They rely on
competency models to also support management by providing practical guidance
and objectivity regarding the achievements and behaviours that need to be
encouraged in the organisation.
To achieve the above-mentioned aims, competency models are integrated into
different Human Resources management processes. In terms of increasing
personal efficiency and supporting the management, for instance, a significant
portion of the organisations apply competencies to performance management.
Within the performance management system competencies are integrated
predominantly with personal development goals (followed by business and
financial goals), which is once again related to the focus on employee engagement
and increased efficiency. In addition to this, the model is applied to training needs
analysis, career development, talent management, assessment and development
centres as well.
The purpose and areas of applicability of the competency model to a large extent
determine the level of detail in which it is developed. The survey results reveal
that organisations which develop competencies in greater detail (with behaviours
and levels of demonstration) use them much more often for specific activities
such as training needs analysis, talent management and
360 degree feedback (compared to participants that present their competencies
by titles and descriptions only). Regarding the number of competencies included
in the model, organisations most frequently choose 6-9 competencies. The level
of detail of competencies has an impact on the efficiency of the model, its clarity
and accessibility, as well as employees attitude
towards it.
The introduction and application of a competency model is related to the stages
of development of an organisation. It is worth noting that a significant share of
small companies (up to 50 employees) as well as those that recently entered the
Bulgarian market (up to three years) do not envisage introducing a competency
model in the next 1-2 years nor, at the time of completing the survey, are they in
the process of developing or implementing one. Participants from companies with
a shorter presence on the Bulgarian market (up to three years) point out that their
competencies in most cases are presented by titles and descriptions only.
Competency models are in the process of being developed, introduced or
reviewed and updated in all companies from the Pharmaceutical sector that took
part in the survey, and they are opting for a smaller number of competencies.
Purpose
Applicability
Level of detail
Stage of introduction
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
7 Competency models
benefits and challenges
Almost half of the manufacturing companies still do not have an implemented
model, which is either about to be developed or is not envisaged for development
in the near future.
This sector also stands out in terms of the target group to which the competency
model is applied or is going to be applied most often to managers and to key
specialists only (Manufacturing). Organisations from the other sectors most
frequently apply their competencies to all employees.
In view of building a competency model applicable for the different target groups,
in most cases organisations integrate core, specific and technical competencies
(or just core and specific). Technical competencies are used in combination with
specific and/or core ones. Core competencies are valid for all employees in an
organisation and are aligned with its mission, strategy and values. They reflect
the core skills necessary for its success. The specific competencies are related
to certain behaviours, attitudes and skills relevant to the different functions in an
organisation and are focused on resolving more particular professional tasks and
problems, typical for the workplace and position.
The process of developing and implementing a competency model in the
organisation is a long one and is accompanied by carrying out in-depth analysis
and overcoming a variety of challenges. Likely due to this complexity and in view
of the need for the competencies to reflect corporate values, almost half of the
surveyed organisations utilise the opportunity to adapt a ready model from a
parent company (headquarters). Companies without international ownership rely
mainly on internal resources.
The choice of approach determines to a certain extent the critical moments
to be expected in the process of developing or adapting the model. Bulgarian
companies, for instance, as well as the Public Administration representatives
experience to a great extent difficulties related to the need to achieve consistency
between the different competencies and avoid overlap of content.
Overall, the most frequently experienced challenge is related to achieving a clear
alignment between the competencies and the organisations business goals.
Other difficulties include achieving clarity and user-friendliness, applicability of the
competencies to all employees and reflection of corporate values.
The difficulties that participants in the survey face at the implementation stage
are related to the practical application of the model, the purely formal attitude,
insufficient understanding of managers about the advantages of the model and
employee resistance towards accepting it.
A comparison between the challenges that restrained these organisations with
already implemented and operational models and those faced by participants
with models which are not functioning or are envisaged for update reveals some
interesting tendencies. Companies that evaluate their competency models
as not functioning have to a greater extent been hindered by an insufficient
understanding on the part of managers about the advantages of the model, as
well as by employee resistance to accepting the model. Participants that plan to
revise and update their models due to certain reasons share that they have also
Selecting an approach
Critical moments in the
process of development
and implementation
Types of competencies
Target group
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
8 Competency models
benefits and challenges
Useful steps
faced stronger employee resistance to accept the model as well as difficulties in
achieving relevance/applicability of the competencies to all employees from the
target group and ensuring clarity and user-friendliness.
This group of participants more often points out the inability of the existing
model to meet the needs of top management as a reason for changing the
competencies. At the same time, generally the survey participants share the
opinion that a change in strategy would trigger a change in their competency
model as well.
The present economic situation encourages more and more organisations to
review and further develop their competency models or plan their introduction
if they do not have one already. One-fifth of the participants with implemented
competency models reveal that those models are currently not operational or
need to be updated. Results from the present survey coupled with KPMGs
experience in designing and introducing competency models as part of larger
initiatives help to identify key moments within the different phases of the process
that influence the success of the model:
precise definition of the purposes that the organisation aims to achieve by
introducing a competency model already during the planning phase. The
purposes determine to a great extent the selection of approach, areas of
application, target group, level of detail and types of competencies
analysis of the advantages and disadvantages of the possible options and
selection of an optimal approach, taking into account the specifics of the
business, the history of the organisation and the available internal capacity
clear definition of the areas of applicability of the competencies and planning
their smooth integration in the respective processes
analysis and definition of the necessary level of detail in view of the purposes
and areas of applicability of the model
definition of the target group the employees to which the competencies will
be applied
alignment of competencies with corporate values and the organisations
strategy
clear, accessible and unambiguous presentation of the competencies most
often a description on a behavioural level that can be easily observed (and
respectively measured)
integration of the competencies in a unified model, avoiding overlap of their
content
analysis of the attitudes towards the introduction of a competency model
in the company, identification of the reasons for possible resistance (for the
different groups) and planning specific steps for overcoming it
preparation of a communication plan, messages and initiatives
envisaging employee availability for participation in the process of design and
introduction of the model and their involvement in view of gathering accurate
information and facilitating the acceptance of the model
checking of the relevance/applicability of the competencies to all participants
included in the target group at an early stage of the process
planning and conducting initiatives related to managers and employees
training on how to work with the model focusing on its practical benefits
follow-up on whether the competencies are up-to-date and timely
amendment if necessary.
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
9 Competency models
benefits and challenges
It is our conviction that these steps can be useful in the process of developing and
introducing a competency model which pertains specifically to your organisation.
We believe that the time, efforts and capacity required for its successful
integration are well justified as the competency model builds the core of Human
Resources management. Competencies provide a clear signal to employees
regarding encouraged behaviours and attitudes, guiding them towards achieving
high results. Different parts of the competency model complement each other
to enable the harmonious functioning of the processes in the organisation. Thus,
the model reflects the identity of your organisation both internally and externally
towards your partners and clients.
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
10 Competency models
benefits and challenges
The results in detail
Results from the survey reveal that one-third of participants that took part in
it (36.4%) already have an implemented and operational competency model.
Designing such a model is planned by 17.1% of participants and an update is
envisaged for 11.4%. The percentage of companies which are in the process
of designing a competency model equals that of organisations in the process of
implementing one (10.2%). For 9.1% of participating companies the model has
already been introduced but does not actually work. Only 5.7% of participants
state that they do not plan to introduce competencies in the next 1-2 years.
Some differences in the results between organisations with a functioning
competency model and those of organisations with implemented but not
functioning models are worth noting. The latter share that the process of
introducing the competencies has to a greater extent been hindered by
insufficient understanding by managers regarding the advantages of the model
(50% compared to 28% for organisations with a functioning competency model)
as well as by employee resistance to accepting the model (50% compared to only
9.4%).
Comparing the results of organisations with currently operational competency
models to those of respondents that envisage updates of their models, we note
that the second group has much more frequently been faced with difficulties
in ensuring relevance/applicability to the whole target group (70% compared to
28.1%) and ensuring clarity and user-friendliness (70% against 46.9%). They have
also faced stronger employee resistance to accepting the model (20% compared
to 9.38%) and point out the inability of the current model to meet the needs of
top management as a reason to change existing competencies (40% compared to
15.6%).

11.4%
17.1%
36.4%
5.7%
9.1%
10.2%
10.2%
0% 20% 40% 60% 80% 100%
Is not envisaged for implementation in
the next 1-2 years
Has been implemented but is not
functioning according to expectations
Has already been implemented and is
currently operational
Is in the process of development
Is planned for revision and update
Is about to be developed
Has already been implemented and is
currently operational
A significant portion of the
companies have a developed
competency model.
Figure 1. At your company, a competency model:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
11 Competency models
benefits and challenges
3.77 13.21 18.87 7.55 7.55 13.21 35.85 11 years or more presence on the Bulgarian market
11.11 11.11 5.56 22.22 5.56 44.44 From 6 to 10 years presence on the Bulgarian market
10.00 10.00 20.00 20.00 40.00
From 3 to 5 years presence on the Bulgarian market
28.57 14.29 28.57 14.29 14.29 Up to 3 years presence on the Bulgarian market
4.00 16.00 20.00 8.00 16.00 8.00 28.00 Without international share
6.35 9.52 15.87 11.11 7.94 9.52 39.68 With international share
14.29 20.00 14.29 2.86 11.43 37.14 Above 500 employees
4.76 14.29 19.05 9.52 14.29 9.52 28.57 From 101 to 500 employees
9.09 18.18 9.09 18.18 45.45 From 51 to100 employees
19.05 4.76 9.52 9.52 19.05 38.10 Up to 50 employees
15.38 7.69 30.77 7.69 15.38 23.08 Manufacturing
30.00 10.00 10.00 50.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
20.00 20.00 20.00 40.00 Energy
5.56 16.67 11.11 16.67 11.11 38.89 Information Technology, Telecommunications, Media
10.00 15.00 10.00 15.00 15.00 5.00 30.00 Trade (Retail and Wholesale, FMCG)
5.26 21.05 5.26 10.53 10.53 47.37 Financial Services
Group
Is not envisaged
for
implementation in
the next 1-2 years
Is planned for
revision and
update
Is about to be
developed
Is in the
process of
development
Is currently
being
designed
Has been
implemented
but is not
functioning
according to
expectations
Has already
been
implemented
and is currently
operational
3.77 13.21 18.87 7.55 7.55 13.21 35.85 11 years or more presence on the Bulgarian market
11.11 11.11 5.56 22.22 5.56 44.44 From 6 to 10 years presence on the Bulgarian market
10.00 10.00 20.00 20.00 40.00
From 3 to 5 years presence on the Bulgarian market
28.57 14.29 28.57 14.29 14.29 Up to 3 years presence on the Bulgarian market
4.00 16.00 20.00 8.00 16.00 8.00 28.00 Without international share
6.35 9.52 15.87 11.11 7.94 9.52 39.68 With international share
14.29 20.00 14.29 2.86 11.43 37.14 Above 500 employees
4.76 14.29 19.05 9.52 14.29 9.52 28.57 From 101 to 500 employees
9.09 18.18 9.09 18.18 45.45 From 51 to100 employees
19.05 4.76 9.52 9.52 19.05 38.10 Up to 50 employees
15.38 7.69 30.77 7.69 15.38 23.08 Manufacturing
30.00 10.00 10.00 50.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
20.00 20.00 20.00 40.00 Energy
5.56 16.67 11.11 16.67 11.11 38.89 Information Technology, Telecommunications, Media
10.00 15.00 10.00 15.00 15.00 5.00 30.00 Trade (Retail and Wholesale, FMCG)
5.26 21.05 5.26 10.53 10.53 47.37 Financial Services
Group
Is not envisaged
for
implementation in
the next 1-2 years
Is planned for
revision and
update
Is about to be
developed
Is in the
process of
development
Is currently
being
designed
Has been
implemented
but is not
functioning
according to
expectations
Has already
been
implemented
and is currently
operational
It is worth highlighting that of all the sectors covered in the survey, Manufacturing
has the largest number of companies with implemented but not functioning
models (15.4%). For approximately one-third of the organisations in this sector
a competency model is still to be developed (30.8%). Another 15.4% do not
envisage introducing a competency model in the next 1-2 year.
None of the Pharmaceutical companies that took part in the survey has
an implemented and operational competency model. An equal number of
organisations from this sector are either in the process of developing the model or
are planning to revise and update it (33.3%).
In 19% of small companies (with up to 50 employees) the implementation of a
competency model is not envisaged for the next 1-2 years. The percentage of
companies that are in the process of implementing a model is the same.
Similar tendencies can be observed in companies that have recently entered the
Bulgarian market (up to three years). An equally large percentage of them are in
the process of developing a model (28.6%) or do not envisage implementation of
a model for the next 1-2 years (28.6%).
These results support our practical observations that the stages of an
organisations development determine the moment of introducing a competency
model. With the number of employees increasing, the need for clarity and
transparency regarding the standards and criteria for successful performance
becomes even more tangible. In the initial stages of a companys penetration in a
specific market its focus is usually on attracting clients and winning market share.
Figure 2. At your company, a competency model:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
12 Competency models
benefits and challenges
For most of the organisations that took part in the survey the introduction
of a competency model was triggered by the need to increase efficiency
on organisational (68.2%) and personal (52.3%) levels. Almost half of the
respondents aim at supporting the management (44.3%) and increasing employee
engagement (44.3%). For 34.1% the introduction of a competency model resulted
from following instructions from a parent company, whereas 26.1% aimed at
supporting a change process in the company (including mergers).
44.3%
52.3%
68.2%
2.3%
26.1%
34.1%
44.3%
0% 20% 40% 60% 80% 100%
Other
Support a change process in the
organisation
Follow instructions from the
headquarters/ parent company
Support the management
Increase employee engagement
Increase personal efficiency
Increase organisational efficiency
Boosting effectiveness is the main
reason for introducing a competency
model.
Figure 3. The introduction of a competency model in the company was/is driven
by the need to:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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13 Competency models
benefits and challenges
1.89 28.30 39.62 37.74 50.94 62.26 24.53 11 years or more presence on the Bulgarian market
33.33 50.00 50.00 55.56 77.78 61.11 From 6 to 10 years presence on the Bulgarian market
10.00 60.00 60.00 50.00 90.00 40.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 42.86 57.14 57.14 57.14 28.57 Up to 3 years presence on the Bulgarian market
4.00 32.00 56.00 52.00 40.00 64.00 8.00 Without international share
1.59 23.81 39.68 41.27 57.14 69.84 44.44 With international share
31.43 45.71 42.86 40.00 51.43 40.00 Above 500 employees
28.57 38.10 42.86 71.43 85.71 23.81 From 101 to 500 employees
9.09 36.36 45.45 45.45 81.82 36.36 From 51 to100 employees
9.52 23.81 52.38 47.62 57.14 71.43 33.33 Up to 50 employees
23.08 53.85 46.15 46.15 53.85 30.77 Manufacturing
10.00 50.00 40.00 60.00 50.00 40.00 20.00 Public Administration
33.33 33.33 33.33 33.33 66.67 Pharmaceuticals
60.00 80.00 80.00 60.00 80.00 40.00 Energy
22.22 38.89 44.44 44.44 88.89 33.33 Information Technology, Telecommunications, Media
25.00 50.00 50.00 70.00 80.00 40.00 Trade (Retail and Wholesale, FMCG)
5.26 10.53 31.58 21.05 47.37 57.89 42.11 Financial Services
Group
Other
Support a
change process
in the
organisation
Increase
employee
engagement
Support the
management
Increase
personal
efficiency
Increase
organisational
efficiency
Follow instructions
from the
Headquarters/
mother company
1.89 28.30 39.62 37.74 50.94 62.26 24.53 11 years or more presence on the Bulgarian market
33.33 50.00 50.00 55.56 77.78 61.11 From 6 to 10 years presence on the Bulgarian market
10.00 60.00 60.00 50.00 90.00 40.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 42.86 57.14 57.14 57.14 28.57 Up to 3 years presence on the Bulgarian market
4.00 32.00 56.00 52.00 40.00 64.00 8.00 Without international share
1.59 23.81 39.68 41.27 57.14 69.84 44.44 With international share
31.43 45.71 42.86 40.00 51.43 40.00 Above 500 employees
28.57 38.10 42.86 71.43 85.71 23.81 From 101 to 500 employees
9.09 36.36 45.45 45.45 81.82 36.36 From 51 to100 employees
9.52 23.81 52.38 47.62 57.14 71.43 33.33 Up to 50 employees
23.08 53.85 46.15 46.15 53.85 30.77 Manufacturing
10.00 50.00 40.00 60.00 50.00 40.00 20.00 Public Administration
33.33 33.33 33.33 33.33 66.67 Pharmaceuticals
60.00 80.00 80.00 60.00 80.00 40.00 Energy
22.22 38.89 44.44 44.44 88.89 33.33 Information Technology, Telecommunications, Media
25.00 50.00 50.00 70.00 80.00 40.00 Trade (Retail and Wholesale, FMCG)
5.26 10.53 31.58 21.05 47.37 57.89 42.11 Financial Services
Group
Other
Support a
change process
in the
organisation
Increase
employee
engagement
Support the
management
Increase
personal
efficiency
Increase
organisational
efficiency
Follow instructions
from the
Headquarters/
mother company
It should be noted that almost all companies from the ITM sector (88.9%) have
introduced competencies in view of increasing organisational efficiency. In the
Energy sector, the percentage of companies that introduced competencies for the
same reason is again very high (80%). The same percentage marks the need to
support management and increase employee engagement. In the Public sector
the need to support the management can be seen as a primary reason (60%). A
possible reason is the need for legally well-sustained and objective management
decisions.
Figure 4. The introduction of a competency model in the company was/is driven by the need to:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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.
14 Competency models
benefits and challenges
Analysis of the survey results shows that competency models are most widely
applied in relation to performance management (75%). Organisations also utilise
competencies for training needs analysis (58%), career development (55.7%),
recruitment (53.4), talent management (40.9%), assessment and development
centres (27.3%) and 360 degree feedback (26.4%).
53.4%
55.7%
58.0%
75.0%
40.9%
27.3%
26.4%
2.3%
0% 20% 40% 60% 80% 100%
Other
360 degree feedback
Assessment and development centres
Talent management
Recruitment
Career development
Training needs analysis
Performance management
Competency models are widely
applied in different HR management
processes.
Figure 5. The competency model in the company is (will be) applied for:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
15 Competency models
benefits and challenges
1.89 30.19 26.42 60.38 69.81 39.62 66.04 54.72 11 years or more presence on the Bulgarian market
27.78 33.33 50.00 44.44 55.56 88.89 44.44 From 6 to 10 years presence on the Bulgarian market
10.00 30.00 50.00 40.00 40.00 100.00 70.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 14.29 42.86 28.57 14.29 71.43 42.86 Up to 3 years presence on the Bulgarian market
4.00 12.00 12.00 64.00 56.00 32.00 72.00 56.00 Without international share
1.59 31.75 33.33 52.38 58.73 44.44 76.19 52.38 With international share
31.43 42.86 60.00 71.43 51.43 77.14 62.86 Above 500 employees
23.81 28.57 57.14 61.90 57.14 80.95 38.10 From 101 to 500 employees
18.18 9.09 36.36 54.55 18.18 72.73 63.64 From 51 to100 employees
9.52 23.81 9.52 57.14 33.33 19.05 66.67 47.62 Up to 50 employees
30.77 23.08 53.85 61.54 23.08 53.85 38.46 Manufacturing
20.00 10.00 10.00 70.00 50.00 10.00 60.00 60.00 Public Administration
33.33 100.00 33.33 Pharmaceuticals
60.00 60.00 80.00 80.00 100.00 80.00 60.00 Energy
38.89 16.67 50.00 27.78 61.11 72.22 55.56 Information Technology, Telecommunications, Media
25.00 50.00 60.00 75.00 40.00 85.00 45.00 Trade (Retail and Wholesale, FMCG)
15.79 21.05 52.63 68.42 42.11 84.21 68.42 Financial Services
Group
Other
360 degree
feedback
Assessment
and
development
centres
Career
development
Training
needs
analysis
Talent
management
Performance
management Recruitment
1.89 30.19 26.42 60.38 69.81 39.62 66.04 54.72 11 years or more presence on the Bulgarian market
27.78 33.33 50.00 44.44 55.56 88.89 44.44 From 6 to 10 years presence on the Bulgarian market
10.00 30.00 50.00 40.00 40.00 100.00 70.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 14.29 42.86 28.57 14.29 71.43 42.86 Up to 3 years presence on the Bulgarian market
4.00 12.00 12.00 64.00 56.00 32.00 72.00 56.00 Without international share
1.59 31.75 33.33 52.38 58.73 44.44 76.19 52.38 With international share
31.43 42.86 60.00 71.43 51.43 77.14 62.86 Above 500 employees
23.81 28.57 57.14 61.90 57.14 80.95 38.10 From 101 to 500 employees
18.18 9.09 36.36 54.55 18.18 72.73 63.64 From 51 to100 employees
9.52 23.81 9.52 57.14 33.33 19.05 66.67 47.62 Up to 50 employees
30.77 23.08 53.85 61.54 23.08 53.85 38.46 Manufacturing
20.00 10.00 10.00 70.00 50.00 10.00 60.00 60.00 Public Administration
33.33 100.00 33.33 Pharmaceuticals
60.00 60.00 80.00 80.00 100.00 80.00 60.00 Energy
38.89 16.67 50.00 27.78 61.11 72.22 55.56 Information Technology, Telecommunications, Media
25.00 50.00 60.00 75.00 40.00 85.00 45.00 Trade (Retail and Wholesale, FMCG)
15.79 21.05 52.63 68.42 42.11 84.21 68.42 Financial Services
Group
Other
360 degree
feedback
Assessment
and
development
centres
Career
development
Training
needs
analysis
Talent
management
Performance
management Recruitment
Survey data reveal some differences in the priority areas for the application of
competency models in the sectors surveyed. All respondents from the Energy
sector (100%) point out that competencies are applied for talent management and
development. Representatives of Public Administration apply competencies to the
greatest extent in career development (70%), whereas manufacturing companies
concentrate on training needs analysis (61.6%). For the remaining sectors the
area most frequently pointed to is performance management.
Figure 6. The competency model in the company is (will be) applied for:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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16 Competency models
benefits and challenges
In the appraisal/performance management system competencies are in most
cases integrated with personal development goals (83%). Following are business
(63.6%), financial (33%) and goals related to functional change (26.1%).
83.0%
63.6%
33.0%
26.1%
1.1%
0% 20% 40% 60% 80% 100%
Other
Goals related to
functional change
Financial targets
Business goals
Personal
development goals
Figure 7. In the appraisal/performance management system the competency
model is (will be) integrated with:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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17 Competency models
benefits and challenges
1.89 22.64 83.02 64.15 37.74 11 years or more presence on the Bulgarian market
33.33 83.33 55.56 27.78 From 6 to 10 years presence on the Bulgarian market
30.00 90.00 80.00 20.00 From 3 to 5 years presence on the Bulgarian market
28.57 71.43 57.14 28.57 Up to 3 years presence on the Bulgarian market
4.00 20.00 76.00 64.00 40.00 Without international share
28.57 85.71 63.49 30.16 With international share
2.86 20.00 91.43 60.00 25.71 Above 500 employees
28.57 76.19 61.90 33.33 From 101 to 500 employees
27.27 63.64 72.73 54.55 From 51 to100 employees
33.33 85.71 66.67 33.33 Up to 50 employees
7.69 61.54 53.85 46.15 Manufacturing
10.00 60.00 90.00 40.00 20.00 Public Administration
33.33 66.67 66.67 100.00 Pharmaceuticals
40.00 100.00 80.00 Energy
22.22 72.22 55.56 38.89 Information Technology, Telecommunications, Media
30.00 85.00 75.00 30.00 Trade (Retail and Wholesale, FMCG)
15.79 100.00 73.68 26.32 Financial Services
Group
Other
Goals related to
functional
change
Personal
development
goals
Business
goals
Financial
targets
1.89 22.64 83.02 64.15 37.74 11 years or more presence on the Bulgarian market
33.33 83.33 55.56 27.78 From 6 to 10 years presence on the Bulgarian market
30.00 90.00 80.00 20.00 From 3 to 5 years presence on the Bulgarian market
28.57 71.43 57.14 28.57 Up to 3 years presence on the Bulgarian market
4.00 20.00 76.00 64.00 40.00 Without international share
28.57 85.71 63.49 30.16 With international share
2.86 20.00 91.43 60.00 25.71 Above 500 employees
28.57 76.19 61.90 33.33 From 101 to 500 employees
27.27 63.64 72.73 54.55 From 51 to100 employees
33.33 85.71 66.67 33.33 Up to 50 employees
7.69 61.54 53.85 46.15 Manufacturing
10.00 60.00 90.00 40.00 20.00 Public Administration
33.33 66.67 66.67 100.00 Pharmaceuticals
40.00 100.00 80.00 Energy
22.22 72.22 55.56 38.89 Information Technology, Telecommunications, Media
30.00 85.00 75.00 30.00 Trade (Retail and Wholesale, FMCG)
15.79 100.00 73.68 26.32 Financial Services
Group
Other
Goals related to
functional
change
Personal
development
goals
Business
goals
Financial
targets
An interesting fact is that all Pharmaceutical companies (100%) integrate their
competencies with financial goals, which could be related to the specifics of the
business as well as to the stage of the models development. The other sectors
integrate their competencies primarily with personal development goals. A
significant part of the participants from the Public Administration (60%) integrate
their competencies with goals related to functional change. This might be related
to reform in the public sector and the strengthening of the administrative capacity.
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 8. In the appraisal/performance management system the competency model is (will be) integrated with:

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18 Competency models
benefits and challenges
Most of the participating organisations (70.9%) apply their competency model
to all employees. For 19.8% of them competencies are used for both managers
and key specialists in the company. A small percentage of respondents apply the
model only to key specialists (4.7%) or to managers (3.5%).
70.9%
1.2%
3.5%
4.7%
19.8%
0% 20% 40% 60% 80% 100%
Other
Managers
Key specialists
Managers and
key specialists
All employees
In most organizations, the model
applies to all employees.
Figure 9. The competency model in your company applies/will apply to:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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19 Competency models
benefits and challenges
Only manufacturing companies apply competency models most often to
managers and key specialists. Pharmaceutical companies apply competencies
equally often to all employees (33.3%), to managers only (33.3%) and to both
managers and key specialists (33.3%).
1.89 3.77 3.77 22.64 67.92 11 years or more presence on the Bulgarian market
27.78 72.22 From 6 to 10 years presence on the Bulgarian market
10.00 90.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 42.86 Up to 3 years presence on the Bulgarian market
8.00 4.00 20.00 68.00 Without international share
1.59 3.17 3.17 19.05 69.84 With international share
2.86 2.86 2.86 28.57 62.86 Above 500 employees
23.81 76.19 From 101 to 500 employees
9.09 9.09 81.82 From 51 to100 employees
9.52 9.52 4.76 66.67 Up to 50 employees
7.69 46.15 30.77 Manufacturing
10.00 90.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
40.00 60.00 Energy
11.11 16.67 72.22 Information Technology, Telecommunications, Media
10.00 20.00 70.00 Trade (Retail and Wholesale, FMCG)
5.26 5.26 89.47 Financial Services
Group
Other Key specialists Managers
Managers and
key specialists All employees
1.89 3.77 3.77 22.64 67.92 11 years or more presence on the Bulgarian market
27.78 72.22 From 6 to 10 years presence on the Bulgarian market
10.00 90.00 From 3 to 5 years presence on the Bulgarian market
14.29 14.29 42.86 Up to 3 years presence on the Bulgarian market
8.00 4.00 20.00 68.00 Without international share
1.59 3.17 3.17 19.05 69.84 With international share
2.86 2.86 2.86 28.57 62.86 Above 500 employees
23.81 76.19 From 101 to 500 employees
9.09 9.09 81.82 From 51 to100 employees
9.52 9.52 4.76 66.67 Up to 50 employees
7.69 46.15 30.77 Manufacturing
10.00 90.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
40.00 60.00 Energy
11.11 16.67 72.22 Information Technology, Telecommunications, Media
10.00 20.00 70.00 Trade (Retail and Wholesale, FMCG)
5.26 5.26 89.47 Financial Services
Group
Other Key specialists Managers
Managers and
key specialists All employees
Figure 10. The competency model in your company applies/will apply to:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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20 Competency models
benefits and challenges
The largest proportion of the surveyed organisations combine core, specific and
technical competencies (29.1%). Similar is the percentage of companies with a
combination of core and specific competencies (25.6%). Core competencies are
only used by 20.9% and specific by only 15.1% of participants.
25.6%
29.1%
20.9%
15.1%
8.1%
1.2%
0% 20% 40% 60% 80% 100%
Core and technical competencies
Specific and technical competencies
Specific competencies
Core (generic) competencies
Core and specific competencies
Core, technical and specific competencies
Competency models in most
cases consist of core, specific and
technical competencies which are
presented in detail.
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 11. The model includes (will include):

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21 Competency models
benefits and challenges
16.98 7.55 28.30 1.89 26.42 18.87 11 years or more presence on the Bulgarian market
5.56 11.11 27.78 22.22 33.33 From 6 to 10 years presence on the Bulgarian market
30.00 30.00 30.00 10.00 From 3 to 5 years presence on the Bulgarian market
20.00 40.00 20.00 20.00 Up to 3 years presence on the Bulgarian market
20.00 12.00 28.00 24.00 16.00 Without international share
13.11 6.56 29.51 1.64 26.23 22.95 With international share
14.29 8.57 25.71 2.86 31.43 17.14 Above 500 employees
14.29 4.76 23.81 23.81 33.33 From 101 to 500 employees
18.18 9.09 45.45 18.18 9.09 From 51 to100 employees
15.79 10.53 31.58 21.05 21.05 Up to 50 employees
10.00 20.00 30.00 40.00 Manufacturing
40.00 20.00 10.00 10.00 20.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
40.00 60.00 Energy
16.67 5.56 33.33 27.78 16.67 Information Technology, Telecommunications, Media
20.00 5.00 25.00 5.00 25.00 20.00 Trade (Retail and Wholesale, FMCG)
36.84 36.84 26.32 Financial Services
Group
Specific
competencies
Specific and
technical
competencies
Core, technical
and specific
competencies
Core and
technical
competencies
Core and
specific
competencies
Core (generic)
competencies
(for the whole
company)
16.98 7.55 28.30 1.89 26.42 18.87 11 years or more presence on the Bulgarian market
5.56 11.11 27.78 22.22 33.33 From 6 to 10 years presence on the Bulgarian market
30.00 30.00 30.00 10.00 From 3 to 5 years presence on the Bulgarian market
20.00 40.00 20.00 20.00 Up to 3 years presence on the Bulgarian market
20.00 12.00 28.00 24.00 16.00 Without international share
13.11 6.56 29.51 1.64 26.23 22.95 With international share
14.29 8.57 25.71 2.86 31.43 17.14 Above 500 employees
14.29 4.76 23.81 23.81 33.33 From 101 to 500 employees
18.18 9.09 45.45 18.18 9.09 From 51 to100 employees
15.79 10.53 31.58 21.05 21.05 Up to 50 employees
10.00 20.00 30.00 40.00 Manufacturing
40.00 20.00 10.00 10.00 20.00 Public Administration
33.33 33.33 33.33 Pharmaceuticals
40.00 60.00 Energy
16.67 5.56 33.33 27.78 16.67 Information Technology, Telecommunications, Media
20.00 5.00 25.00 5.00 25.00 20.00 Trade (Retail and Wholesale, FMCG)
36.84 36.84 26.32 Financial Services
Group
Specific
competencies
Specific and
technical
competencies
Core, technical
and specific
competencies
Core and
technical
competencies
Core and
specific
competencies
Core (generic)
competencies
(for the whole
company)
In the Energy sector core competencies for the whole company prevail (60%).
Pharmaceutical companies are focusing on specific competencies, using them
on their own (33%), combining them with core and technical (33%) or just with
technical ones (33%). Respondents from the ITM (33%), Financial Services
(36.8%) and Trade (25%) sectors most often integrate core, technical and specific
competencies. Representatives from the last two sectors just as frequently apply
only core and specific competencies (Financial Services 36.8% and Trade
25%).
Figure 12. The model includes (will include):
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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22 Competency models
benefits and challenges
More than half of the organisations (51.1%) have applied a detailed approach
to developing their competencies besides titles and descriptions they include
observable behaviours and levels of demonstration. The same is the percentage
of companies that use titles, descriptions and observable behaviours (21.6%)
and just titles and descriptions (21.6%). Only 3.4% of respondents have their
competencies developed as titles only.
51.1%
21.6%
21.6%
3.4%
0% 20% 40% 60% 80% 100%
Titles
Titles and descriptions
Titles and descriptions with observed
behaviours
Titles and descriptions with observed
behaviours and levels of demonstration
Figure 13. The competencies are (will be) presented as:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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23 Competency models
benefits and challenges
51.1%
21.6%
21.6%
3.4%
0% 20% 40% 60% 80% 100%
Titles
Titles and descriptions
Titles and descriptions with observed
behaviours
Titles and descriptions with observed
behaviours and levels of demonstration
56.60 20.75 18.87 3.77 11 years or more presence on the Bulgarian market
14.29 42.86 14.29 From 6 to 10 years presence on the Bulgarian market
61.11 22.22 11.11 5.56 From 3 to 5 years presence on the Bulgarian market
30.00 10.00 60.00 Up to 3 years presence on the Bulgarian market
56.00 20.00 24.00 Without international share
49.21 22.22 20.63 4.76 With international share
71.43 14.29 14.29 Above 500 employees
47.62 23.81 19.05 9.52 From 101 to 500 employees
27.27 36.36 36.36 From 51 to100 employees
33.33 23.81 28.57 4.76 Up to 50 employees
53.85 23.08 7.69 Manufacturing
40.00 10.00 50.00 Public Administration
100.00 Pharmaceuticals
80.00 20.00 Energy
66.67 22.22 11.11 Information Technology, Telecommunications, Media
55.00 10.00 30.00 5.00 Trade (Retail and Wholesale, FMCG)
36.84 31.58 21.05 10.53 Financial Services
Group
Titles and
descriptions with
observed
behaviours and
levels of
demonstration
Titles and
descriptions
with observed
behaviours
Titles and
descriptions Titles
56.60 20.75 18.87 3.77 11 years or more presence on the Bulgarian market
14.29 42.86 14.29 From 6 to 10 years presence on the Bulgarian market
61.11 22.22 11.11 5.56 From 3 to 5 years presence on the Bulgarian market
30.00 10.00 60.00 Up to 3 years presence on the Bulgarian market
56.00 20.00 24.00 Without international share
49.21 22.22 20.63 4.76 With international share
71.43 14.29 14.29 Above 500 employees
47.62 23.81 19.05 9.52 From 101 to 500 employees
27.27 36.36 36.36 From 51 to100 employees
33.33 23.81 28.57 4.76 Up to 50 employees
53.85 23.08 7.69 Manufacturing
40.00 10.00 50.00 Public Administration
100.00 Pharmaceuticals
80.00 20.00 Energy
66.67 22.22 11.11 Information Technology, Telecommunications, Media
55.00 10.00 30.00 5.00 Trade (Retail and Wholesale, FMCG)
36.84 31.58 21.05 10.53 Financial Services
Group
Titles and
descriptions with
observed
behaviours and
levels of
demonstration
Titles and
descriptions
with observed
behaviours
Titles and
descriptions Titles
The largest percentage of representatives of the Public sector (50%) share that
the competencies are presented with titles and descriptions only, which probably
influences the purely formal attitude towards the model, a challenge mentioned
by participants from that sector. All participants from Pharmaceutical companies
(100%) have competencies developed to the level of observable behaviours.
Companies with shorter-term presence on the Bulgarian market (up to 3 years)
in most cases point out that their competencies are presented as titles and
descriptions (60%).
Data analysis identifies differences in the level of detail to which competency
models have been developed depending on the purpose and application of the
competencies. Only 15.8% of the organisations which have their competencies
presented as titles and descriptions only use the model for talent development.
For comparison purposes, the percentage of organisations with defined
behaviours and levels of demonstration is 57.8%. Similar tendencies can be
observed regarding the applicability of competencies to training needs analysis
(26.3% to 77.8%) and 360 degree feedback (5.26% to 40%). Competency
models developed in detail serve as a sound basis for designing successful talent
development programmes.
Figure 14. The competencies are (will be) presented as:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
24 Competency models
benefits and challenges
Nearly half of the respondents (48.9%) have 6-9 competencies, 30.7% above 10
and the rest 18.2% 5 or less.
48.9%
30.7%
18.2%
0% 20% 40% 60% 80% 100%
5 or less
10 or more
6 to 9
32.08 50.94 16.98 11 years or more presence on the Bulgarian market
28.57 14.29 28.57 From 6 to 10 years presence on the Bulgarian market
33.33 55.56 11.11 From 3 to 5 years presence on the Bulgarian market
20.00 50.00 30.00 Up to 3 years presence on the Bulgarian market
20.00 64.00 16.00 Without international share
34.92 42.86 19.05 With international share
40.00 51.43 8.57 Above 500 employees
23.81 61.90 14.29 From 101 to 500 employees
27.27 36.36 36.36 From 51 to100 employees
23.81 38.10 28.57 Up to 50 employees
30.77 30.77 23.08 Manufacturing
20.00 80.00 Public Administration
33.33 66.67 Pharmaceuticals
40.00 60.00 Energy
27.78 44.44 27.78 Information Technology, Telecommunications, Media
40.00 40.00 20.00 Trade (Retail and Wholesale, FMCG)
31.58 57.89 10.53 Financial Services
Group
10 or more 6 to 9 5 or less
32.08 50.94 16.98 11 years or more presence on the Bulgarian market
28.57 14.29 28.57 From 6 to 10 years presence on the Bulgarian market
33.33 55.56 11.11 From 3 to 5 years presence on the Bulgarian market
20.00 50.00 30.00 Up to 3 years presence on the Bulgarian market
20.00 64.00 16.00 Without international share
34.92 42.86 19.05 With international share
40.00 51.43 8.57 Above 500 employees
23.81 61.90 14.29 From 101 to 500 employees
27.27 36.36 36.36 From 51 to100 employees
23.81 38.10 28.57 Up to 50 employees
30.77 30.77 23.08 Manufacturing
20.00 80.00 Public Administration
33.33 66.67 Pharmaceuticals
40.00 60.00 Energy
27.78 44.44 27.78 Information Technology, Telecommunications, Media
40.00 40.00 20.00 Trade (Retail and Wholesale, FMCG)
31.58 57.89 10.53 Financial Services
Group
10 or more 6 to 9 5 or less
It should be noted that Pharmaceutical companies tend to use a smaller
number of competencies. A larger percentage of them (66.7%) have five or less
competencies. Trade companies rely on 6-9 (40%) and 10 or more competencies
(again 40%). This tendency is valid for participants from the Manufacturing sector
as well (30.1% have 6-9 competencies and another 30.1% 10 or more).
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 15. How many competencies are included in the model?
Figure 16. How many competencies are included in the model?
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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25 Competency models
benefits and challenges
Almost half of the organisations that took part in the survey (44.3%) have
developed their competency models by adapting an existing model from their
parent company (the Headquarters). More than one-fourth of the participants
(26.1%) relied on entirely internal resources, 14.8 % on external advisors, and
12.5% of them used a ready model from another organisation.
44.3%
26.1%
14.8%
12.5%
0% 20% 40% 60% 80% 100%
By using a model from another company
With the help of an external advisor
Entirely with internal resources
By adapting an existing model from the
parent company/ headquarters
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 17. The development of the competency model in the company was/will be
done:
Participants choose different
approaches to developing the model.

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26 Competency models
benefits and challenges
24.53 13.21 33.96 28.30 11 years or more presence on the Bulgarian market
28.57 42.86 From 6 to 10 years presence on the Bulgarian market
66.67 33.33 From 3 to 5 years presence on the Bulgarian market
20.00 60.00 20.00 Up to 3 years presence on the Bulgarian market
24.00 12.00 20.00 44.00 Without international share
11.11 12.70 53.97 19.05 With international share
22.86 5.71 45.71 25.71 Above 500 employees
14.29 14.29 38.10 33.33 From 101 to 500 employees
9.09 27.27 45.45 18.18 From 51 to100 employees
4.76 14.29 47.62 23.81 Up to 50 employees
23.08 15.38 23.08 23.08 Manufacturing
20.00 10.00 40.00 30.00 Public Administration
100.00 Pharmaceuticals
40.00 40.00 20.00 Energy
5.56 11.11 44.44 38.89 Information Technology, Telecommunications, Media
15.00 15.00 50.00 20.00 Trade (Retail and Wholesale, FMCG)
21.05 5.26 47.37 26.32 Financial Services
Group
With the help of
an external
advisor
By using a
model from
another
company
By adapting an
existing model
from the parent
company/
headquarters
Entirely with
internal
resources
24.53 13.21 33.96 28.30 11 years or more presence on the Bulgarian market
28.57 42.86 From 6 to 10 years presence on the Bulgarian market
66.67 33.33 From 3 to 5 years presence on the Bulgarian market
20.00 60.00 20.00 Up to 3 years presence on the Bulgarian market
24.00 12.00 20.00 44.00 Without international share
11.11 12.70 53.97 19.05 With international share
22.86 5.71 45.71 25.71 Above 500 employees
14.29 14.29 38.10 33.33 From 101 to 500 employees
9.09 27.27 45.45 18.18 From 51 to100 employees
4.76 14.29 47.62 23.81 Up to 50 employees
23.08 15.38 23.08 23.08 Manufacturing
20.00 10.00 40.00 30.00 Public Administration
100.00 Pharmaceuticals
40.00 40.00 20.00 Energy
5.56 11.11 44.44 38.89 Information Technology, Telecommunications, Media
15.00 15.00 50.00 20.00 Trade (Retail and Wholesale, FMCG)
21.05 5.26 47.37 26.32 Financial Services
Group
With the help of
an external
advisor
By using a
model from
another
company
By adapting an
existing model
from the parent
company/
headquarters
Entirely with
internal
resources
All representatives from the Pharmaceutical Sector (100%) adapted their
headquarters model. The same approach is most widely used in the Energy
Sector (40%), accompanied by the use of a model from another company (again
40%). Manufacturing companies share that besides a model from their parent
organisation (23.1%), they rely on their internal resources (23.1%), as well as on
external advisors (23.1%). It is possible that the specifics of this sector call for
highly specific competency models, adapted for respective organisations.
Organisations with international participation preferred to adapt their headquarters
model (54%), whereas Bulgarian companies relied on internal resources (44%).
Figure 18. The development of the competency model in the company was/will be done:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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27 Competency models
benefits and challenges
The most frequently mentioned challenge when developing and adapting the
competency model is the achievement of clear alignment between competencies
and the organisations business goals (60.2%). More than half of the participants
(51.1%) were faced with difficulties in achieving clarity and user-friendliness.
Further challenges include achievement of applicability of competencies to all
employees (38.6%), consistency between different competencies and avoiding
overlap of content (37.5%) as well as reflecting corporate values (27.3%).
51.1%
60.2%
38.6%
37.5%
27.3%
4.6%
0% 20% 40% 60% 80% 100%
Other
Reflecting the corporate values
Reaching consistency between the different
competencies and avoiding overlap of content
Achieving relevance/applicability of the
competencies to all employees from the target
group
Ensuring clarity and user-friendliness
Achieving clear alignment between
competencies and business goals
Figure 19. During the development/adaptation of the competency model we en-
countered/expect the following challenges in:
Companies are faced with numerous
challenges when developing and
implementing the competency
models.
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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.
28 Competency models
benefits and challenges
3.77 41.51 43.40 58.49 24.53 64.15 11 years or more presence on the Bulgarian market
42.86 28.57 42.86 28.57 57.14 From 6 to 10 years presence on the Bulgarian market
5.56 33.33 33.33 44.44 27.78 50.00 From 3 to 5 years presence on the Bulgarian market
10.00 20.00 30.00 30.00 40.00 60.00 Up to 3 years presence on the Bulgarian market
8.00 64.00 36.00 52.00 24.00 64.00 Without international share
3.17 26.98 39.68 50.79 28.57 58.73 With international share
5.71 45.71 37.14 51.43 22.86 65.71 Above 500 employees
19.05 52.38 42.86 33.33 57.14 From 101 to 500 employees
18.18 27.27 54.55 27.27 45.45 From 51 to100 employees
9.52 52.38 33.33 57.14 28.57 61.90 Up to 50 employees
30.77 38.46 69.23 15.38 53.85 Manufacturing
90.00 70.00 70.00 20.00 70.00 Public Administration
66.67 33.33 33.33 100.00 Pharmaceuticals
40.00 40.00 40.00 60.00 100.00 Energy
5.56 38.89 27.78 38.89 27.78 55.56 Information Technology, Telecommunications, Media
25.00 50.00 60.00 30.00 50.00 Trade (Retail and Wholesale, FMCG)
15.79 31.58 15.79 36.84 26.32 57.89 Financial Services
Group
Other
Reaching consistency
between the different
competencies and
avoiding overlap of
content
Achieving
relevance/applicability of
the competencies to all
employees from the
target group
Ensuring clarity
and user-
friendliness
Reflecting the
corporate
values
Achieving clear
alignment between
competencies and
business goals
3.77 41.51 43.40 58.49 24.53 64.15 11 years or more presence on the Bulgarian market
42.86 28.57 42.86 28.57 57.14 From 6 to 10 years presence on the Bulgarian market
5.56 33.33 33.33 44.44 27.78 50.00 From 3 to 5 years presence on the Bulgarian market
10.00 20.00 30.00 30.00 40.00 60.00 Up to 3 years presence on the Bulgarian market
8.00 64.00 36.00 52.00 24.00 64.00 Without international share
3.17 26.98 39.68 50.79 28.57 58.73 With international share
5.71 45.71 37.14 51.43 22.86 65.71 Above 500 employees
19.05 52.38 42.86 33.33 57.14 From 101 to 500 employees
18.18 27.27 54.55 27.27 45.45 From 51 to100 employees
9.52 52.38 33.33 57.14 28.57 61.90 Up to 50 employees
30.77 38.46 69.23 15.38 53.85 Manufacturing
90.00 70.00 70.00 20.00 70.00 Public Administration
66.67 33.33 33.33 100.00 Pharmaceuticals
40.00 40.00 40.00 60.00 100.00 Energy
5.56 38.89 27.78 38.89 27.78 55.56 Information Technology, Telecommunications, Media
25.00 50.00 60.00 30.00 50.00 Trade (Retail and Wholesale, FMCG)
15.79 31.58 15.79 36.84 26.32 57.89 Financial Services
Group
Other
Reaching consistency
between the different
competencies and
avoiding overlap of
content
Achieving
relevance/applicability of
the competencies to all
employees from the
target group
Ensuring clarity
and user-
friendliness
Reflecting the
corporate
values
Achieving clear
alignment between
competencies and
business goals
All organisations from the Pharmaceutical and Energy sectors as well as most
of the participants from the Financial Services (57.9%) and ITM (55.6%) sectors
point out the achievement of clear alignment between competencies and their
organisations business goals as the most significant challenge. Achieving clarity
and user-friendliness is the most frequently shared difficulty by Trade (60%) and
manufacturing companies (69.2%). Public Administration to a great extent faced
difficulty because of the need to achieve consistency between the different
competencies and avoid overlap of content (90%).
The same difficulty is encountered more often by Bulgarian companies (64%) than
by those with international ownership (27%), which may be due to the fact that in
most cases the latter use complete models from their headquarters.
Figure 20. During the development/adaptation of the competency model we encountered/expect the following challenges in:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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29 Competency models
benefits and challenges
46.6%
53.4%
34.1%
20.5%
11.4%
8.0%
0% 20% 40% 60% 80% 100%
Other
Integrating the model in the HR activities
Employee resistance to accepting the model
Insufficient understanding from the
managers about the advantages of the
model
Formal attitude towards the model
Difficulties in the practical application of the
competency model
The most frequent challenges in the process of implementation are related to
the practical application of the model (53.4%), the purely formal attitude towards
it (46.6%), insufficient understanding by managers about its advantages (34.1%)
and employee resistance to accepting it (20.5%). Only 11.4% of the organisations
have difficulties integrating the model in their HR activities.
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 21. During the implementation of the competency model we encountered/
are expecting the following challenges:

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30 Competency models
benefits and challenges
5.66 11.32 47.17 22.64 60.38 39.62 11 years or more presence on the Bulgarian market
14.29 14.29 42.86 57.14 42.86 From 6 to 10 years presence on the Bulgarian market
11.11 16.67 55.56 11.11 38.89 27.78 From 3 to 5 years presence on the Bulgarian market
10.00 30.00 50.00 40.00 Up to 3 years presence on the Bulgarian market
16.00 52.00 32.00 68.00 32.00 Without international share
11.11 9.52 44.44 15.87 47.62 34.92 With international share
2.86 8.57 54.29 14.29 54.29 54.29 Above 500 employees
9.52 28.57 38.10 14.29 52.38 33.33 From 101 to 500 employees
27.27 36.36 18.18 36.36 18.18 From 51 to100 employees
4.76 4.76 47.62 38.10 61.90 9.52 Up to 50 employees
7.69 61.54 23.08 46.15 23.08 Manufacturing
10.00 10.00 60.00 40.00 60.00 40.00 Public Administration
33.33 33.33 66.67 Pharmaceuticals
40.00 80.00 40.00 60.00 40.00 Energy
16.67 16.67 55.56 27.78 44.44 38.89 Information Technology, Telecommunications, Media
10.00 35.00 10.00 65.00 35.00 Trade (Retail and Wholesale, FMCG)
15.79 5.26 26.32 0.05 47.37 36.84 Financial Services
Group
Other
Integrating
the model in
the HR
activities
Formal
attitude
towards the
model
Employee
resistance to
accepting the
model
Difficulties in the
practical application of
the competency model
Insufficient
understanding from
the managers about
the advantages of
the model
5.66 11.32 47.17 22.64 60.38 39.62 11 years or more presence on the Bulgarian market
14.29 14.29 42.86 57.14 42.86 From 6 to 10 years presence on the Bulgarian market
11.11 16.67 55.56 11.11 38.89 27.78 From 3 to 5 years presence on the Bulgarian market
10.00 30.00 50.00 40.00 Up to 3 years presence on the Bulgarian market
16.00 52.00 32.00 68.00 32.00 Without international share
11.11 9.52 44.44 15.87 47.62 34.92 With international share
2.86 8.57 54.29 14.29 54.29 54.29 Above 500 employees
9.52 28.57 38.10 14.29 52.38 33.33 From 101 to 500 employees
27.27 36.36 18.18 36.36 18.18 From 51 to100 employees
4.76 4.76 47.62 38.10 61.90 9.52 Up to 50 employees
7.69 61.54 23.08 46.15 23.08 Manufacturing
10.00 10.00 60.00 40.00 60.00 40.00 Public Administration
33.33 33.33 66.67 Pharmaceuticals
40.00 80.00 40.00 60.00 40.00 Energy
16.67 16.67 55.56 27.78 44.44 38.89 Information Technology, Telecommunications, Media
10.00 35.00 10.00 65.00 35.00 Trade (Retail and Wholesale, FMCG)
15.79 5.26 26.32 0.05 47.37 36.84 Financial Services
Group
Other
Integrating
the model in
the HR
activities
Formal
attitude
towards the
model
Employee
resistance to
accepting the
model
Difficulties in the
practical application of
the competency model
Insufficient
understanding from
the managers about
the advantages of
the model
The practical application of the model is most often pointed out as challenging
by representatives from the Financial Services (47.4%), Trade (65%),
Pharmaceuticals (66.7%) and Public Administration (60%). The last group face
equally frequently problems caused by the purely formal attitude toward the
model (60%). Participants from ITM (55.6%), Energy (80%) and Manufacturing
(61.6%) face the same challenge.
Figure 22. During the implementation of the competency model we encountered/are expecting the following challenges:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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31 Competency models
benefits and challenges
65.9%
38.6%
23.9%
9.1%
0% 20% 40% 60% 80% 100%
Other
Current model not meeting needs of top
management
External economic environment*
Change in the companys strategy
A significant number of the surveyed organisations (65.9%) anticipate a need
to change their competencies when their companys strategy changes. Other
reasons include the external economic environment (38.6%) and the inability of
the existing model to meet the needs of top management (23.9%).
*(Including regulatory changes, political changes, macroeconomic indicators)
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Figure 23. The change of competencies in the organisation is due (would be due)
to:
Change in organisational strategy
usually leads to an update of the
competency model.

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32 Competency models
benefits and challenges
9.43 22.64 35.85 67.92 11 years or more presence on the Bulgarian market
14.29 28.57 57.14 42.86 From 6 to 10 years presence on the Bulgarian market
27.78 44.44 77.78 From 3 to 5 years presence on the Bulgarian market
20.00 20.00 30.00 50.00 Up to 3 years presence on the Bulgarian market
12.00 24.00 40.00 68.00 Without international share
7.94 23.81 38.10 65.08 With international share
8.57 25.71 25.71 68.57 Above 500 employees
9.52 23.81 42.86 61.90 From 101 to 500 employees
27.27 54.55 72.73 From 51 to100 employees
14.29 19.05 47.62 61.90 Up to 50 employees
7.69 46.15 76.92 Manufacturing
20.00 40.00 40.00 70.00 Public Administration
100.00 66.67 Pharmaceuticals
60.00 40.00 80.00 Energy
16.67 27.78 38.89 61.11 Information Technology, Telecommunications, Media
10.00 15.00 30.00 60.00 Trade (Retail and Wholesale, FMCG)
5.26 26.32 31.58 63.16 Financial Services
Group
Other
Current model
not meeting
needs of top
management
External economic
environment (regulatory
changes, political changes,
macroeconomic indicators)
Change in the
companys
strategy
9.43 22.64 35.85 67.92 11 years or more presence on the Bulgarian market
14.29 28.57 57.14 42.86 From 6 to 10 years presence on the Bulgarian market
27.78 44.44 77.78 From 3 to 5 years presence on the Bulgarian market
20.00 20.00 30.00 50.00 Up to 3 years presence on the Bulgarian market
12.00 24.00 40.00 68.00 Without international share
7.94 23.81 38.10 65.08 With international share
8.57 25.71 25.71 68.57 Above 500 employees
9.52 23.81 42.86 61.90 From 101 to 500 employees
27.27 54.55 72.73 From 51 to100 employees
14.29 19.05 47.62 61.90 Up to 50 employees
7.69 46.15 76.92 Manufacturing
20.00 40.00 40.00 70.00 Public Administration
100.00 66.67 Pharmaceuticals
60.00 40.00 80.00 Energy
16.67 27.78 38.89 61.11 Information Technology, Telecommunications, Media
10.00 15.00 30.00 60.00 Trade (Retail and Wholesale, FMCG)
5.26 26.32 31.58 63.16 Financial Services
Group
Other
Current model
not meeting
needs of top
management
External economic
environment (regulatory
changes, political changes,
macroeconomic indicators)
Change in the
companys
strategy
All Pharmaceutical companies point out the external economic environment as a
reason for reviewing and updating their competency model, whereas for all other
surveyed sectors a change in company strategy is the most frequent reason.
Figure 24. The change of competencies in the organisation is due (would be due) to:
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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33 Competency models
benefits and challenges
Appendix
According to the industry sector in
which the organisations operate,
participants were distributed in seven
groups:
Financial services
Trade (Retail and Wholesale, FMCG)
Information Technology,
Telecommunications, Media (ITM)
Energy
Pharmaceuticals
Public Administration
Manufacturing
Industry sector
Public Administration
11.4%
Financial Services
21.6%
Trade (Retail and
Wholesale, FMCG)
22.7%
Information
Technology,
Telecommunications,
Media
20.5%
Energy
5.7%
Pharmaceuticals
3.4%
Manufacturing
14.8%
According to the approximate
number of employees working in
the organisation, we have grouped
participants as follows:
Up to 50 employees
From 51 to 100 employees
From 101 to 500 employees
Above 500 employees
Approximate number of employees
Above 500
employees
39.8%
From 101 to 500
employees
23.9%
From 51 to100
employees
12.5%
Up to 50 employees
23.9%
Participants profile
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria

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34 Competency models
benefits and challenges
Based on the type of ownership, we
split participants into two groups:
International ownership
No international ownership
International ownership)
No
28.4%
Yes
71.6%
Presence on the Bulgarian market
11 years or more
60.2%
From 6 to 10 years
20.5%
From 3 to 5 years
11.4%
Up to 3 years
8.0%
In terms of the years of presence
on the Bulgarian market, we divided
participants in the following groups:
Up to 3 years
From 3 to 5 years
From 6 to 10 years
11 years or more
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
Source: Competency models benefits and challenges, Insights from 2010 survey on practical application in Bulgaria
2010 KPMG Advisory EOOD, a wholly owned subsidiary of KPMG Bulgaria OOD, a Bulgarian limited
liability company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International, a Swiss cooperative. All rights reserved.
Contacts
Gergana Mantarkova
Managing Partner
Tel +359 2 9697 500
Fax +359 2 9805 340
[email protected]
Anna Pavlova
Director, Advisory
People & Change
Tel +359 2 9697 350
Fax +359 2 9805 340
[email protected]
Borislava Loboshka
Manager, Advisory
People & Change
Tel +359 2 9697 350
Fax +359 2 9805 340
[email protected]
KPMG in Bulgaria
Sofia
45/A Bulgaria Boulevard
Sofia 1404, Bulgaria
Tel +359 2 9697 300
Fax +359 2 9805 340
[email protected]
Varna
3 Sofia Street
Varna 9000, Bulgaria
Tel +359 52 699 650
Fax +359 52 611 502
[email protected]
kpmg.bg
2010 KPMG Advisory EOOD, a wholly
owned subsidiary of KPMG Bulgaria OOD, a
Bulgarian limited liability company and a
member firm of the KPMG network of
independent member firms affiliated with
KPMG International, a Swiss cooperative. All
rights reserved.
The information contained herein is of a general nature and is not intended to address the
circumstances of any particular individual or entity. Although we endeavor to provide accurate and
timely information, there can be no guarantee that such information is accurate as of the date it is
received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.