Academic journal article Management Revue

The Relationship between Salesperson Competencies and Performance in the Korean Pharmaceutical Industry**

Academic journal article Management Revue

The Relationship between Salesperson Competencies and Performance in the Korean Pharmaceutical Industry**

Article excerpt

This study investigates how competencies lead to performance. We propose that salespersons in the Korean pharmaceutical industry require three central competency dimensions: motive and traits, self-concept, and knowledge and skills. Further, we argue that the level of salesperson competencies is positively related to his/her performance, and that the quality of leader-member exchange positively moderates the relationship between competencies and performance. Results based on analyses of data from a sample of 457 salespersons and managers from 5 different pharmaceutical companies in Korea support our research model.

Key words: Competency, Salesperson Competency, Performance, Pharmaceutical Industry, Leader-Member Exchange, Korean Company


Today, business practitioners are faced with many new opportunities to utilize competency methods to improve individual, team, and organizational performance. The use of competency models as the basis for performance appraisal and compensation has become widespread in business organizations. The competency movement was originally initiated by McClelland (1973) as an alternative to the trait and intelligence approaches in measuring and predicting human performance. Originally applied to the field of educational achievement testing, the competency approach was soon adopted for many business applications.

While some eminent figures in the field have viewed the competency movement as revolutionary and the best way to measure and predict human performance (Lawler, 1994; McClelland, 1994, 1973), others have questioned the validity of the approach (Barrett & Depinet, 1991; Barrett, 1997). As the growth of competency applications continues to accelerate, it is appropriate to reflect on its influence on human performance. This article investigates how key aspects of competency lead to performance and explores moderating effects on the relationship between competencies and performance. This study through the implications derived from the results, attempts to provide managerial direction for development of salespersons in the pharmaceutical industry and development of competencies of salespersons.

Theory and Hypotheses

The definition of the term "competency" has evolved significantly over the years. The earliest definition provided by McClelland(1973) referred to competencies as components of performance associated with "clusters of life outcomes". McClelland (1973) questioned the traditional aptitude and achievement tests and tried to develop substitutable methods to improve those tests. He finally developed the so-called "Behavioral Event Interview (BEI)" to elaborate critical incident interview techniques. He tried to select the superior performers by distinguishing high from normal performers. In doing so, he utilized a competency concept (Klemp, 1978).

The term "competency" became popular when Boyatzis defined the super performers as "competent managers" (Boyatzis, 1982). Spencer and Spencer (1993) defined competency as internal characteristics of an individual that produced effective and superior performance. Sparrow (1996) divided into three categories: organizational competency, managerial compentency, and individual competency. He defined individual competency as list of behavioral characteristics related to job tasks. Schippment, Ash, Carr & Hesketh (2000) defined competency as adequate knowledge to successfully complete job tasks. Clearly, there is a wide range of definitions, even among a fairly homogeneous expert population, underscoring the difficulty of pinpointing a standard definition of the term. This lack of consensus should not be too surprising, given the multiple domains in which the terms "competent" or "competency" are prevalent (Schippment, et al., 2000). Based on current thinking the definition that best fits the attributes of competency is given by Arthey & Orth (1999): "A competency is a set of observable performance dimensions, including individual knowledge, skills, attitudes, and behaviors, as well as collective team, process, and organizational capabilities, that are linked to high performance, and provide the organization with sustainable competitive advantage. …

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