The Relationship Between Competency and Job Performance of Employees : A case of the Service Sector SMEs in Malaysia

Job performance of employees plays an important factor in determining an organisation performance since highly performing individuals will assist organisation to achieve its strategic aims thus sustaining the organisation competitive advantage. In Malaysia, the small and medium size enterprises (SMEs) play a crucial role in the economic development. Although the service sector SMEs forms the largest sector of the SMEs in Malaysia, it tends to experience low labour productivity and well as skills shortages problem. Past researches have shown that competency can significantly influence the job performance of employees. Thus the aim of this study is to examine the relationship between competency and job performance of employees in the service sector SMEs in Malaysia. Data was collected using mail survey approach that was distributed to 1500 employees. There were 300 returned surveys, which were deemed usable for further analysis resulted in 20% response rate. The result suggests a significant relationship between competency and job performance. The finding serves as a guide for skills upgrading effort that emphasis on competencies desired or providing higher quality of job performance.