Year-End Reviews Are Coming. Are You Ready?

Performance reviews can be one of the most dreaded times of year for both employees and managers. A big reason is that nobody really knows what “success” looks like in their role. Sure, most people have a job description when they’re hired, but that document is usually outdated within months. As employees grow, take on new responsibilities, and think about the next step in their career, how are you measuring success? How are you tying individual performance back to company goals?

In my career as an HR leader, I’ve seen a clear difference between organizations that have successful performance management processes and those that struggle. The biggest differentiator is simple: they have a competency model.

What Is a Competency Model?

A competency model is basically a map that clearly defines the key skills, behaviors, and attributes needed to succeed in your organization. It breaks those competencies down by level of experience, so employees know exactly what’s expected at their current role and what they need to demonstrate to move to the next one.

For example, communication is a common competency in almost every organization. A competency model might define what communication looks like at the entry level, how it evolves at the manager level, and how it’s demonstrated by senior leaders. The competencies themselves remain consistent across the organization, but the expectations shift depending on the role.

This structure creates a shared language. Employees understand what’s expected, managers know how to evaluate performance, and everyone has a transparent roadmap for growth.

Why Competency Models Matter

When done well, competency models:

• Build transparency and accountability by making expectations clear at every level.

• Give managers a consistent framework to evaluate performance and set goals.

• Empower employees to take ownership of their career path and proactively prepare for the next step.

• Reduce bias and subjectivity in performance reviews by focusing on observable, measurable behaviors.

• Create alignment between individual growth and organizational goals.

Think about it: if your team members knew exactly what they needed to demonstrate to move from “Staff Accountant” to “Senior Accountant,” wouldn’t that make year-end conversations easier? Instead of vague feedback or discretionary decisions, you’d have a concrete roadmap. Employees could seek out the right projects, training, and mentorship opportunities. Managers could coach more effectively and advocate for promotions with confidence.

Without a competency model, reviews often feel murky, inconsistent, and sometimes unfair. With one, you build clarity, engagement, and retention. In fact, research shows that employees who feel they have clear expectations are more engaged, more productive, and more likely to stay with their organization 

When I was the Director of HR at a regional firm, we had a real problem: we couldn’t keep quality administrative assistants. They stayed for a year or two, then left for jobs they described as “the next step in their career.” Why? Because while the client-facing side of the business had well-defined titles and career paths, our administrative and operations functions didn’t. Without a roadmap, employees assumed they had to leave to grow and we struggled with turnover of over 40% a year in this department.

I led the effort to build a competency model for this department. We mapped out what growth could look like and what skills people could develop to move forward internally. Once employees could see a career path, everything changed: retention jumped, engagement increased, and turnover dropped to under 10% consistently for the next five years (and counting!). That’s the power of a competency model. It’s not just an HR tool, it’s a strategic business investment.

How It Works in Practice

Let’s go back to the accountant example. Imagine you have a Staff Accountant who wants to move up to Senior Accountant. With a competency model in place, they can look at the Senior Accountant column for each competency and compare it to their current skills. Together with their manager, they can set specific, measurable goals to close any gaps.

By the time they’re ready for promotion, the evidence is right there. Their manager can easily point to the competencies they’ve mastered, the ones they’ve been developing, and the proactive steps they’ve taken. Instead of debating “are they ready,” the conversation becomes “look how ready they are.”

That is the power of a competency model.

Ready to Set Your Organization Up for 2026 Success?

If you’re heading into year-end reviews right now, this might feel like déjà vu. Another cycle of unclear expectations, inconsistent evaluations, and tough conversations. But it doesn’t have to be that way.

Competency models give you a fresh start. They bring structure to performance management, make reviews more meaningful, and provide your employees with the clarity they crave. And when employees have clarity, they are more engaged, more productive, and more likely to stay.

This is the perfect time to start planning for 2026. If you want your performance review process to feel less stressful and more strategic, let’s talk about building a competency model for your organization. It’s an investment that pays dividends for years to come.