Skill and Performance
| Author | Dimitrinka Stoyanova,Irena Grugulis |
| Date | 01 September 2011 |
| Published date | 01 September 2011 |
| DOI | http://doi.org/10.1111/j.1467-8543.2010.00779.x |
Skill and Performancebjir_779515..536
Irena Grugulis and Dimitrinka Stoyanova
Abstract
It is popular to assume that there is a link between skill and performance, yet the
evidence is tenuous. Both terms defy simple definition and much current work
aggregates findings, conflating firms that compete on the basis of skill with
those that do not. This article provides a detailed review of the difficulties
involved. Skill may indeed contribute to performance on the shop floor but the
performance of the organization as a whole is not the same as that of the
shop-floor writ large, while soft skills are difficult to assess and judgments may
be contaminated by prejudice. It concludes with suggestions for better research
designs that could capture this relationship.
1. Introduction
It is popular to assume that there is a link between skill and performance.
Indeed, much of the activity and interest in this area is predicated on the
existence of such a link and the likelihood, in the words of title of the Leitch
Report (Leitch 2006), that prosperity for all will come from world-class skills.
Such a link does exist. Individuals can add to their lifetime earnings, decrease
the likelihood and length of unemployment, and secure more interesting
work by obtaining particular qualifications (Machin and Vignoles 2001),
while professional bodies and trade unions can gain higher wages and greater
levels of influence for their members (Turner 1962: 38). Training has been
linked to higher profits in firms (Hambledon Group Ltd. 2000) and skill
differentials form an enduring aspect of national differences in productivity
(Broadberry and O’Mahony 2004; O’Mahony 2002).
However, the causal mechanisms involved in all of these instances are
questionable. Education may be a positional competition (Crouch et al.
1999); power over work processes may secure skilled status rather than skill
being rewarded with power over the work process (Turner 1962). And profits
Irena Grugulis is at Durham University Business School. Dimitrinka Stoyanova is at University
of St Andrews School of Management.
British Journal of Industrial Relations doi: 10.1111/j.1467-8543.2010.00779.x
49:3 September 2011 0007–1080 pp. 515–536
© Blackwell Publishing Ltd/London School of Economics 2010. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.
may result in higher levels of training as firms that have performed well
choose to use some of the surplus to reward employees rather than
training, causing profits through higher skills, more effective working prac-
tices, increased levels of job satisfaction and commitment, and better com-
munications (Keep and Mayhew 1988). While different countries boast so
many disparities that it is often difficult to ascertain the exact cause of any
variations in productivity, much less put a precise figure to a particular
variable, few seem to doubt that a link between skill and performance
should exist and many studies seem to take as axiomatic that it does exist,
but this belief seems to be held in the absence of proof. As Lloyd and
Payne (2004a) point out, the existing empirical evidence is rather limited
and not coherent.
This article highlights the problems involved in capturing, measuring,
and linking skill and performance. It starts by reviewing the difficulties
involved in defining and finding proxies for both skill and performance
before exploring three different aspects of skill in detail, selected not for
their typicality but for the difficulties they present for academic research. It
also considers the literature on human resource management (HRM), skill,
and performance, partly because skills and training feature in all of the
studies and partly because there is an argument that ‘bundling’ skills and
training with other human resource (HR) practices intensifies their impact
and makes it more likely that they will contribute to good performance.
The links observed throughout are problematic: skill and performance are
both complex, observable at a number of levels and through a variety of
means, and many of the proxies used are inadequate. Many existing studies
also make a fundamental error by bundling together all of the companies in
a particular economy or sector. Yet not all firms or sectors compete on the
basis of skills so whole economy studies conflate low-, no- and high-skills
competition in ways that are likely to neutralize any significant effects.
Equally, research often gauges investments in skills and performance
outputs simultaneously so that any benefits would need to appear at the
moment the money was spent, an assumption that may fit the practicalities
of research design but is not particularly realistic. With this in mind, the
conclusions are constructive ones. For academics, it is argued that although
studying the relationship between skill and performance is difficult, it is not
impossible and better proxies are available that could capture some of the
complexity and the longitudinal aspects of both. Moreover, future studies
might productively concentrate on areas and sub-sectors where skills can,
at least theoretically, make a difference. Policy makers need to become
more sensitive to the reasons why skill does affect performance in order to
both avoid seeing skills as a universal panacea and, more constructively,
target existing interventions better. Finally, drawing on Lloyd and Payne’s
(2004b, 2005, 2006) work, we suggest that in preference to its existing
concentration on business needs and performance, this debate might
constructively be refocused on the implications of skills for individuals and
society.
516 British Journal of Industrial Relations
© Blackwell Publishing Ltd/London School of Economics 2010.
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