As we have already stated, competencies no doubt play a critical role in determining individual job performance.
However, many studies show that CAPABILITIES are the key differentiators and play a much bigger role than COMPETENCIES in determining a person’s job performance. It is especially personality and emotional capabilities (EQ) + cognitive capabilities (IQ) that drive individual performance.
What does research tell us?
Quite clearly that General Mental Ability (loosely referred to as IQ) and personality and emotional capability (loosely referred to as EQ) are by far the key drivers of individual job performance.

Frank L. Schmidt and John E. Hunter are American Industrial/Organizational Psychology PhDs, and in 1998 they published “The Validity and Utility of Selection Methods in Personnel Psychology.” In this very wide - ranging study, where the effectiveness of many different assessment methods and tools were studied, they found that General Mental Ability is the strongest predictor of job success.
They stated that:

The purely empirical research evidence in I/O psychology showing a strong link between General Cognitive Ability (GCA) and job performance is so massive that there is no basis for questioning the validity of GCA as a predictor of job performance. (The Role of General Cognitive Ability and Job Performance: Why There Cannot Be a Debate, Frank L. Schmidt)

According to Daniel Goleman, psychologist and award - winning author of the book Emotional Intelligence , EQ accounted for 67% of the abilities deemed necessary for superior performance in leaders and mattered twice as much as technical expertise. Law et al. (2004)[106] found that EQ was the best predictor of job performance beyond general cognitive ability among IT scientists in a computer company in China. Similarly, Sy, Tram, and O’Hara (2006)[104] found that EQ was associated positively with job performance in employees from a food service company.[109]
However, many organisations don’t realise this and as a result place their selection focus on the tip of the iceberg:
The reality however is that roughly two thirds of job performance is driven by people’s capabilities (EQ + IQ) = 68%, while about roughly only a third can be attributed to their competencies acquired through experience (18% ) and education (10%).
Capability (EQ + IQ) drives 2/3's of Job Performance
Competencies drive 1/3 of Job Performance
We will elaborate more on this research in later modules.
One of the key consequence of emphasising COMPETENCIES while neglecting CAPABILITIES when recruiting or promoting or identifying talent is poor individual performance.
But just how costly is this to organizations?
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