Evaluation of competency dimensions for employee performance assessment: evidence from micro, small, and medium enterprises

Purpose In recent years, there has been a growing emphasis on competency-based systems as a means of assessing employee performance. These systems assess the degree to which the competencies of employees align with the requirements of their employment positions. This study aims to identify, prioritize, and make contextual interrelationships of the competency dimensions that are relevant for evaluating employees in the context of Indian manufacturing MSMEs. Design/methodology/approach These dimensions were identified through an extensive literature review and interviews with industry experts. Further, a mixed-methods approach, including the “Bayesian Best-Worst Method” (BBWM), is applied for prioritizing important dimensions, whereas for making mutual relationships, the “Interpretive Structural Modeling” (ISM) method is utilized. “Matrice d'impacts croisés multiplication appliquée á un classment” (MICMAC) is also known as “cross-impact matrix multiplication applied to classification” is used for clustering competency dimensions based on their “driving power” and “dependence power”. Findings The findings reveal that among the primary dimensions, “creative performance,” and among the sub-dimensions, “innovative behaviors,” are the most critical competency dimensions for an employee assessment. The study also found that “smart working”, “factual and theoretical knowledge”, “empathy at work”, “understanding of specific knowledge”, and “engagement ideas and activities” are the main dimensions driving employees' competency. Originality/value This paper provides contribution to the competence literature by identifying and evaluating competency dimensions for assessing employees' performance within manufacturing MSMEs in an emerging economy such as India. The study also assesses the rank and contextual relationship between the identified dimensions as no past research focused on the same by using BBWM and ISM in the Indian manufacturing MSMEs context.