Academic journal article Asian Social Science

Determining the Importance of Competency and Person-Job Fit for the Job Performance of Service SMEs Employees in Malaysia

Academic journal article Asian Social Science

Determining the Importance of Competency and Person-Job Fit for the Job Performance of Service SMEs Employees in Malaysia

Article excerpt


The small and medium enterprises (SMEs) have contributed to the economic growth and competitiveness of many countries. However, as the SMEs continue to grow as an important entity in many economies including Malaysia, many factors have dampened such progress. While previous studies had focused on its macro perspective in terms of firm level and industry level performance, this study attempted to address the basic issue of SMEs employees in terms of their job performance. This study is underpinned by the theory of job performance and further supported by the theory of congruence. The main objective of this research is to investigate on the relationship that may exist between three variables comprised of competency, person-job fit and the employees' job performance in the context of service SMEs. Using a quantitative method, a sample of 324 responses was collected using a mail survey from 1500 distributed questionnaires. Results show significant relationships between competency, person-job fit and the job performance of employees. Conclusions and implications of the study were discussed.

Keywords: SMEs, service SMEs, job performance, competency, person-job fit, job performance, Malaysia

1. Introduction

One of the important factors that can contribute to organizational performance is employee job performance. Employees who performed well will not only help organizations to meet strategic goals. They are also playing an important role in marinating organization competitiveness (Dessler, 2011). As such, it is important to identify the factors that can affect the job performance of employees both in large enterprises and in SMEs. The SME sector plays a vital role in both the developed and developing countries in terms of economic growth and promoting competitiveness (Caniels & Romijn, 2005). In general, 50% GDP of most developed countries comes from this sector (Kefela, 2010) while it contributed approximately 30% to 60% of the GDP of the East Asian region with an estimated 70% of employment (Hall, 2002). As such, many researchers are interested to examine the various obstacles that hinder their progress (Alasadi & Abdelrahim, 2008).

SMEs are a major sector in Malaysia. Of all the 523,132 business establishments that were involved in a Census on Establishments and Enterprises in year 2005, it was found that the majority of the companies in Malaysia is made up of SMEs. The data obtained showed that there were almost 99.2% or 518,996 SMEs in Malaysia (Department of Statistics, 2006). Thus, the significance of carrying out this study in the context of SMEs is evidenced in view of how important the sector is to the economic development of Malaysia. There are three sectors of SMEs in Malaysia comprised of manufacturing, service and agriculture (Saleh & Ndubisi, 2006).

In terms of sectoral size, 86.5% of the SMEs in Malaysia is made up of service SMEs. This figure has placed the service SMEs as the largest sector of the SMEs establishments in Malaysia (Department of Statistics, 2006). There are 2.2 million people employed in the service SMEsas compared to the manufacturing sector (740,438 employees) and agriculture sector (131,130 employees) (Aris, 2007). However, labor productivity tends to be higher among the employees of larger enterprises than those of the smaller firms. In Malaysia, only RM0.05 million value-added and RM0.13 million outputs per employee were generated by SME employees as compared to those from the larger enterprises which recorded approximately RM0.1 million of value-added and RM0.32 million outputs per employee (SME Annual Report, 2007). This condition had been invoked by the prevailing problems of lack of skills and abilities among the employees of SMEs as compared to those from the larger enterprises (Reed, Walsh, & Grice, 2001). Additionally, the labor productivity between those working in the service SMEs and those in the manufacturing SMEs have not been in proportion with the number of employment. …

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