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Background  Competent managers are essential to the productivity of organisations and the sustainability of health systems. Effective workforce development strategies sensitive to the current competency development needs of health service managers (HSMs) are required.    Purpose  To conduct a 360° assessment of the competence of Australian HSMs to identify managerial competence levels, and training and development needs.    Methods  Assessment of 93 middle-level HSMs from two public hospitals ( n  = 25) and five community health services (CHS) ( n  = 68), using the Managerial Competency Assessment Partnership (MCAP) framework and tool, conducted between 2012 and 2014 in Victoria, Australia.    Results  Mean competency scores from both self- and combined colleagues’ assessments indicated competence (scores greater than five but less than six) without guidance, but many HSMs have not had extensive experience. Around 12% of HSMs were unable to demonstrate the competency of ‘ evidence-informed decision-making ’ and 4% of HSMs were unable to demonstrate the competency of ‘ enabling and managing change ’.    Conclusion  The assessments confirmed managerial competence for the majority of middle-level HSMs from hospitals and CHS in Victoria, but found competency gaps. In addition, the assessment confirmed managerial strengths and weaknesses varied across management groups from different organisations. These findings suggest that the development of strategies to strengthen the health service management workforce should be multifaceted.    Practice implications  A focus on competency in performance evaluation and development using the MCAP framework and tool not only provides insights into performance of HSMs, but also has the potential to provide an organisation strategic advantage through succession planning and advancing managers’ competence via learning needs analysis and targeted professional development. Linking competencies of HSMs to organisational objectives and strategies provides optimal use of the human resource capacity, improving the organisation’s productivity and sustainability.

An evidence-based approach to understanding the competency development needs of the health service management workforce in Australia