Many definitions exist for this concept, which does nothing but confuse those who try to understand it. HRSG offers the following definition, which has been recognized by leaders in strategic HR management:

• Competencies describe employee job behaviours that account for good or bad performance at the individual, unit, and organizational levels. Put otherwise, business results are the "what" of employee performance, whereas competencies are the "how."
• Because they are defined in terms of behaviours, competencies are necessarily observable and therefore measurable.
• Competencies translate the strategic direction and values of the organization into expected employee behaviour.
• Competencies can be technical in nature (e.g., ability to use Java programming in a particular context) or soft (e.g., shows initiative in such a way as to promote the particular goals of the business unit).
• Competencies stem from the knowledge, skills, abilities, attitudes and personality traits of employees.