Competency can be defined as the term used to identify a particular area of expertise and in general the competency can be applied at the overall organization level, management level and employee level as well. When the case with employees is considered each and every employee or a group of employees are in general possessed with a peculiar skill set and they are masters of that particular competency.

In general most of the organizations focus on the core competency of the employees and make use of them to achieve the organizational objectives and they strive a lot to retain the employees and their competency with them for a long time and they are implementing the competency based compensation across the organization. The main aim of this research is to evaluate the role of competency based compensation in achieving the core business objectives across the small software companies and for this purpose Levelsoft software organization is considered.

A qualitative research methodology will be implemented and the required primary source of information is gathered in the form of interviews with project manager, team leaders, HR and employees and based on the research findings and analysis the core objective of the research are evaluated.