Does manager soft skills competence impact unit performance? Not sufficient, but quite necessary

Abstract

Firms worldwide increasingly link competency-based appraisals to rewards as a tool to align human capital to business strategy and performance. Its assumption is that competence mastery at the individual level would drive up unit- or organizational-level performance. However, few empirical studies tested the empirical validity of this assumption. We conducted a large-scale empirical analysis, involving “live” and consequential soft skills competence appraisal data for 682 unit managers in a large bank. We tested if appraised proficiency in four soft skills-related competencies influenced unit-level performance, using both a sufficiency logic and a necessity logic. Our results indicated that, while from a sufficiency logic, unit-level performance could not be significantly explained from individual-level mastery of soft skills, from a necessity logic competence in soft skills at the individual level were necessary – with a large effect – to achieve high unit-level performance. Implications of our findings for soft skill development, appraisal and reward are discussed.