The skills involved can be defined by the organization concerned, or by third party institutions. They are usually defined in terms of a skills framework, also known as a competency framework or skills matrix. This consists of a list of skills, and a grading system, with a definition of what it means to be at particular level for a given skill.

To be most useful, skills management needs to be conducted as an ongoing process, with individuals assessing and updating their recorded skill sets regularly. These updates should occur at least as frequently as employees’ regular line manager reviews, and certainly when their skill sets have changed. Skills management systems record the results of this process in a database, and allow analysis of the data.

Skills management provides a structured approach to developing individual and collective skills, and gives a common vocabulary for discussing skills. As well as this general benefit, three groups of employees receive specific benefits from skills management.

Individual employees

As a result of skills management, employees should be aware of the skills their job requires, and any skills gaps that they have. Depending on their employer, it may also result in a personal development plan (PDP) of training to bridge some or all of those skills gaps over a given period.

Line managers

Skills management enables managers to know the skill strengths and weaknesses of employees reporting to them. It can also enable them to search for employees with particular skill.

Organization executives

A rolled-up view of skills and skills gaps across an organization can enable its executives to see areas of skill strength and weakness. This enables them to plan for the future against the current and future abilities of staff, as well as to priorities areas for skills development.

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