Measuring the Relationship Between Managerial Competencies and Performance

The use of competency systems to evaluate, reward, and promote managers has become commonplace in many organizations in recent years. Yet, despite their popularity, there is little evidence that competency systems increase managerial effectiveness. In this study, we estimate the relationship between managerial competencies and performance at both the individual and organizational unit levels. We find evidence that competencies are positively related to individual-level performance and that individual managerial performance may be increased by mentoring on a competency system. The evidence of a link between competencies and unit-level performance is weaker.