Changes in the business environment have in recent years exceeded expectations and challenged the way organisations manage their businesses. Increased concentration in the marketplace following significant changes to the barriers to entry has resulted in organisations seeking to deliver competitive advantage in different ways. Some organisations have tried to strip away at non-core capabilities, redesign their processes and acquire competitors fiercely. Ultimately most of these changes have impacted the employees within the organisations. This systems science research explores the competency approach to employee management. It identifies the environmental changes that have led to such an approach including those within the field of Human Resource Management and discusses the impact of these changes on managing the performance of employees. The thesis explores the recent trend of adopting a competency strategy to concentrate employee behaviour on specific organisational capabilities. The research surveyed Human Resource directors in the UK to gauge their opinion of the difficulties and successes associated with adopting a competency strategy. A Systemic Competency Framework was developed which was initially validated with two case studies. The Systemic Competency Framework proposes a five-stage process that guides Human Resource practitioners through the design, implementation and management of a competency strategy both in an evaluative and design context.