Purpose This paper follows three objectives. The paper aims to demonstrate a synoptic view of the historical evolution of competence, significant growth and changes in conversation. The second objective is to investigate the meaning and definitional usage of competence and competency. The third objective is to present a synoptic view of different dimensions of competence. Design/methodology/approach This paper reviews the selected literature spanning from 1959 to date from various databases using the following keywords: competence, competency, employee competence, employee competency, competency management and competency-based management. A total of 170 studies were selected in the first wave. In the second wave, a detailed assessment was made, as suggested by Tranfield Denyer and Smart, to ascertain the relevance of the articles. In this way, only 63 studies were selected for the review. This study also considers other relevant literature. Findings The historical evolution demonstrates that competence scholarship has focused on use of the concept in different fields and contexts, theoretical frameworks for competence development and strategic relevance of competence-based (demand-based) human resource management. Results also suggest that the term competency and competence are interchangeably usable. Finally, the review summarizes a total of 16 dimensions of competence, studied in various contexts and classifies them into hard and soft competence and further dividing them into knowledge, skill and self-actualization-related competence. Research limitations/implications This paper discusses various research implications for human resource development scholars and professionals. Originality/value This paper is a unique attempt to review the literature on three themes of employee competence.

Drawing on the resource-based view, this paper seeks to examine the influence of employee competencies on organizational performance using a sample of 325 managerial and non-managerial employees working in Indian public and private sector banks. The study employed a cross-sectional research design, and the data were collected through a structured questionnaire using convenience sampling. Confirmatory factor analysis was used to check the reliability and validity of the dimensions, and the proposed hypotheses were tested by using structural equation modelling. The results indicated a positive and significant impact of selected employee competencies on organizational performance except for self-competence, which showed an insignificant and negative effect. The study is of immense potential to help policy and decision-makers of the Indian banking industry to develop and implement strategies for improving employee competencies, which, in turn, are instrumental in enhancing organizational performance. This study is a unique attempt to examine the impact of various employee competence dimensions on organizational performance, particularly in the Indian banking industry.

ABSTRACT

Drawing upon the human capital theory, this article articulates the impact of different human resource management (HRM) practices on various dimensions of employee competence in the Indian context. The survey method was employed to collect data from 325 banking employees including managers and non-managers employed in the State Bank of India, the Bank of Baroda, the Housing Development Finance Corporation and the Industrial Credit and Investment Corporation of India. The self-competence, team competence and social competence are the dimensions of employee competencies and HRM practices include recruitment and selection, training and development, employee involvement and performance appraisal. The validity and reliability of the variables are evaluated through the confirmatory factor analysis and the hypotheses are tested using structural equation modelling. The study’s analysis revealed mixed results wherein a significant and positive impact was found between some HRM practices and employee competencies and an insignificant impact between other HRM practices and employee competencies. The study’s findings would serve as a guide to the management and policymakers of banks for developing and enhancing the desired employee competencies by investing in HRM practices, thereby better performance at the organization level. This research work enriches the existing literature on HRM and development by empirically validating the HRM-competence linkages in the Indian banking context, where studies of this nature are minimal.

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