Hi Vikram
The materials given by the members are good.
In simple words, competency is anything which enables a person to achieve or attain the goal.
Whenever we do our respective work, we always strive to attain an objective. To attain the objective, we should have some desired and/or acquired qualities. These qualities are known as competencies. If we talk about HR domain, an HR executive's competency would be lesser than the Head-HR. As we grow up the ladder, we acquire knowledge, skills, attitude towards our work. This helps us to bring in and enhance our competencies.
Some of the competencies may be: knowledge of business, planning and prioritization, decision making, strategic orientation, etc.
Performance gaps: There may be different levels of competency. Suppose there are 5 levels of competency. There is a desired level and an actual level of competency. Suppose the desired level of competency for HR manager is 3, but is actual level is 1. Then the performance gap is 2. Now the assessing head will have to see how this gap can be filled. Either some training, counseling, etc would be provided to him or he may be given notice to perform well or would have to leave. Mainly it is to see where a person/employee stands and how is gap will affect the company's performance. Measuring performance gaps is one of the very vital tools for training needs identification.
regards
Anuradha