COMPETENCY-BASED PERFORMANCE MANAGEMENT: A REVIEW OF THE LITERATURE ON THE ALIGNMENT BETWEEN INDIVIDUAL PERFORMANCE, TEAM EFFECTIVENESS, AND ORGANIZATIONAL GOALS

Abstract

Competency-based performance management has proven to be an integral strategic approach in systematically integrating individual achievements, team effectiveness, and organizational goals. This literature review was carried out through the library research method by analyzing the latest academic sources from the 2021-2025 period to identify the mechanism of alignment between the three performance dimensions. The results of the analysis show that the integration of competencies into the human resource management system creates evaluation transparency, increases employee motivation, and strengthens organizational competitiveness in the digital era. Important findings reveal that the effectiveness of competency-based performance management systems is highly dependent on the organizational context, including the external culture, structure, and environment that serves as a critical moderator. The study concludes that the implementation of competency-based performance management represents a strategic investment in developing sustainable human resource capabilities, thereby contributing to long- term organizational success and adaptation to complex market dynamics.