This paper explores issues in developing and implementing a competency-based human resource development strategy. The paper summarizes a literature review on how competency models can improve HR performance. A case study is presented of American Medical Systems (AMS), a mid-sized health-care and medical device company, where the model is being used to improve employee performance and gain a competitive advantage. While there are numerous benefits from using behavior-based competency models, there are also some challenges. (Contains 3 figures.) [For complete proceedings, see ED491481.]