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A Study on Assessment of Skill Gap to Enhance Workforce Performance

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International Journal of Management, Technology And Engineering ISSN NO : 2249-7455

A Study on Assessment of Skill Gap to Enhance Workforce

Performance

Manjunath S1*, M B Shravan2, Dechakka B B3

1
Dept. of Business Administration
Vidyavardhaka College of Engineering
Mysuru, Karnataka-570002
India
manjugayathri44@gmail.com
2
Dept. of Business Administration
Vidyavardhaka College of Engineering
Mysuru, Karnataka-570002
India
mbshravan2007@gmail.com
3
Dept. of Business Administration
Vidyavardhaka College of Engineering
Mysuru, Karnataka-570002
India
dechakka.b@gmail.com

Abstract:

The performance of frontline employees in any organization depends on the skill sets they
have and these skill sets determine the employees’ performance quality in different business
situations. However in today’s complex economy, organizations are finding difficult to
sustain the competition because of huge skill gap in the workforce. Since analysis of skill gap
provide crucial information of the employees so that the managers can focus on necessary
skills that are required to enhance performance. The purpose of the study was to assess the
skill gap and to know the relationship between skills and performance of the employees in
designing industry. The study was conducted using questionnaire with 101 samples and
considered communication skill, technical skills, problems-solving skills, interpersonal skills
and decision-marking skills. The study results at Sanria Engineering Pvt Ltd, Mysuru found a
significant relationship between skill and employee’s performance. Correlation and
regression confirms that all the considered skill will impact employee performance except
technical skills inferring implication of technical skill is minimal in improving performance of
company. Organization should therefore take necessary initiation to improve skill of the
employees required in the workplace.

Keywords: Skill Sets, Skill gap, employee performance.

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1. INTRODUCTION:

High level competition, especially among the frontline workforce, has contributed to the
growth and development of skill competition. The skill needed to be successful in today’s
designing industry has changed over a period of time and have an impact not only on the
profession but also on workforce in the designing industry. Although the organization
provides education and training, still there is large gap that is detrimental to the growth of
organization (Drysdale, 2012)Skill gap describes the situation in which workers skills are
incompetent for doing the job. There is a lack of interest in employees as well as employer in
assessing the skill gap. Skill gap has the potential to lower the company’s productivity level
and increase the company cost. In addition, the skill gap can reduce the company’s profit
level and have an adverse effect on the company’s sustainability. So finding new ways to
enhance employee’s performance is very important for the organization, so that they can use
the resources effectively and efficiently (Kaplan, 2001). Measuring expected skills and
employees’ ability to perform the job are therefore very important to improve performance in
order to achieve objectives of the company

SKILL ANALYSIS: It seems very strange that the word skill at once center-focused, even
now it has no consensus among people. Because each discipline’s meaning varies from
individual to individual (Green 2011). Required perceived skill can be referred as skill and
skill gap in the job is the difference between the perceived skill and employee skill at work
(EMSI, 2013). There are several distinguished contributions to the skill concept, one of which
was published in 1990 is Work and Occupation. But most of the paper was addressed from
the point of view of sociology. After 1990, the concept of skill brought attention not only to
sociology but also to economics and psychology. Productivity skills, expandable skills, and
social skill are considered to be three key characteristics in personality quality. The concept
of skill can therefore be studied in three views namely: economics, psychology and sociology.

The term “Skill mismatch” is more commonly used in the context of classical economy
theory. According to economic theory, skill mismatch are used to describe the gap between
labor supply and demand (Bound & Holzer, 2006). Many economists used the word skill
mismatch to describe the unemployment situation, in which jobs are available but cannot be

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filled due to lack of skills (Green 2011). In neo-classical economics, skill is one of the main
ingredients in human capital, while wealth is other. Human capital can be viewed as the
discounted value of current and future earnings of the person from individual point of view
(Becker 1964, Mincer 1974). Trainings are provided to increase human capital of
organization. Training and development are therefore investments in skills to be used in
uncertain period of time (Bhattacharya & Wright, 2005). The major limiting factor of
neoclassical economics: The use of skills in the organization is limited by the extension of
relationship with organization quality and culture (Hashmito 2010, Stevens, 1999 and 2002,
Acemoglu & Pischke, 2002).

The concept of skill in sociology looks skill concept from employee and employer frame
work i.e. within the production process with main focus on the complexity of the activities
which are bundled into job (Attewell, 1990). In order to perform these complex tasks, greater
learning and high rewards are needed. The important contribution of sociology to understand
the concept of skills is skill can be socially constructed during the process of performing
complex activities ( Attewell, 1990, Wajcman, 1991, Stearns & Cockburn, 2006).

The concept of skill in psychology has come from a long way since it is part of inherent
learning. The skill is defined as a complex ability to reinforce positive rate (Libet &
Lewinsohn, 1973) and social accepted behavior that make the person interact with the others.
From the literature the definition of skills revolves around the communication and interaction
with others. But the modern concept of skill in psychology defined as the ability to
successfully perform a variety of tasks at a high level of performance.

Skill gap: The American society for training and Development (ASTD) defines skill gap as
gap between the current capability of organization and skills it needs to achieve its goal. So it
can be referred as perceived mismatch between employer’s skill need and the available
workforce’s skill. Some people often refer to the skill gap as a compensation gap where
employers are not willing to pay sufficiently to bring in the skill required. Others call it a
training gap where employers do not provide necessary training or the gap in the education
and the employers need (EMSI 2013). The skill gap in the organization can be defined as the
gap which does not allow to grow or to remain competitive as it is unable to find employees
with right knowledge to fit into the critical job. Thus the performance of the company will be
hampered by skill gap due to low productivity and lack of quality. (Bennett & McGuinness,
2009) It is therefore necessary to identify the skills in the workplace of the company rather

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than to identify gap in the workforce prior to selection due to difficulties in recruiting skilled
labor despite paying high salaries. Quietly often, the company tends to hire incompetent
workers not due to lack of skill availability but due to the selection process. Also reiterated in
recent exploration (Andrew Weaver 2013) that it is not the skill shortage creates problem, it is
the mechanism and suggested that instead of focusing on external skill labor supply, it is
better to focus on the factors that make job process complicated.

From the literature we can classify the factor that affects skills gap: Academic system
weakness that fails to train graduates with basic soft skills and technology skill (Salas,
Shuffler, Thayer, Bedwell, & Lazzara, 2015, Livingstone, 2018, Makransky et al., 2016,
Berger & Frey, 2016, Genlott & Grönlund, 2016). New employees fail to socialize to
working environment (Song, Chon, Ding, & Gu, 2015) and the fast changing environment.
With the rise in the competition, organization increased their scrutiny of employee’s skills
they needed because of skills required for the workplace, has been extended from technical
skill to soft skill even from the experienced workforce. Based on the existing body of
knowledge, skill can be classified into soft skill and hard skill as two major groups. Soft skills
includes: skill related to people such as communication skills, interpersonal skill and hard
skills includes: technical skill, problem-solving skills, decision making skills etc.

SOFT SKILLS:

Interpersonal Skills: Defined as the social and interpersonal qualities necessary to promote
and interact with other people (Azim et al., 2010, Gibb, 2014). Interpersonal skills are often
center staged in literature with cognitive skills focusing primarily on cognitive domain and
measure by standardized skills (Franz 2014). Wheaton, 1990 argues that manager’s success
depends on being able to manage behavior with others and also to build his own behavior
depending on the situation. The term interpersonal skills are interchangeably used with social
skill, human skills, and face-to-face skills etc. most of the time. Honey 1988 refers
interpersonal skills as skill of the people to manage the behavior of one’s to interact with
others and also expressed these skill are not related to being good nor winning friends unless
the behavior has defined objective. From this in view the success and failure of manager
depends on the level of interpersonal skill that they possess and to construct the skills to
achieve the goals

Communication Skills: Communication can be defined as the transmitting process of

information from individual-to-individual (Keyton, 2008). Communication study is important

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for both organization and employees because each activity need one or other form of
communication. So communication is the factor that affects the effectiveness of individual
and organization (Brun & Cooper, 2016) So, good communication is a tool for achieving
productivity and maintaining strong working relationship at all level of organization. The
organization with strong communication structure, build good relationship with the
employees resulting in increased performance.

Hard Skills:

Technical Skills: The ability to use special skill or expertise to perform a particular job is
technical skill Green, 2000 defines technical skills as the ability of one unit of labor effort to
convert input into output and (Green 1989) also states that minimum requirement of technical
skill is needed to solve complex problem. With this importance of technical skills,
management should support improving the technical skills of employees (Kirkley & Dupaul,
1989). But alone technical skill is not sufficient to improve performance of employees
(Nicole, Vaughan, Zabihullah, & Mei, 2016). Many studies have noted the importance of
technical skill, but a balance of technical skills and soft skills in employees are necessary for
the growth of organization.

Problem Solving Skills: Enhancing problem solving skills are the best practice of good
organization (Bereiter & Scardamalia, 1993) The organization relies on this skill of
employees to solve complex problems and to face uncertain circumstances (Schon, 1987).
Many organizations are enhancing problem solving skills of employees through development
programs (Lohman & Finkelstein, 2000). Although the technology has reduced the problem
solving capabilities of employees, there has emerged new forms of problems solving
abilities (Brand-Gruwel & Stadtler, 2011).

Decision Making Skills: The term problem solving and decision making is often used in the
workplace interchangeably, but is not the same. As the term suggest, problem solving begins
with problem identification, whereas decision making skills are necessary for solving
problems. The ability of employees to take decision is influenced not only by knowledge and
experience but also the structural empowerment prevailing in the organization (Wu, Yang,
Liu, & Ye, 2016. Bandura & Wood, 1989, argues that the ability of individual to make
complex decisions affects the organizations’ own performance and sustainability to grow.

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Many researchers are still evaluating the skill gap in different industries and sectors, which is
evident from the above literature. This research was done to assess the skill gap in designing
industry and to know the relationship between the skills needed to perform the job. In
addition to analyzing the skill gap determinants, this paper attempts to explore the potential
skill gap factor that affects the performance in designing industry so that company will
understand skill gap which is hindering growth so that they can strategically formulate policy
. We also evaluate the impact of the factors affecting performance in doing the research. As,
very few researches done in the designing industry to find the gap and to know the impact of
skill gap determinants on performance.

OBJECTIVES OF THE STUDY:

1- To analyze the skill gap of work force.

2- To measure the relationship between skill gap determinants and employee performance.
3- To evaluate the impact of skills gap determinants on employee performance.

Research Methodology

The present study is based on the survey carried out at Sanria Engineering and Consulting Pvt
Ltd, Mysuru. The company hires Civil and Mechanical Engineers to provide multi-
disciplinary solutions such as steel detailing, building design, consultancy on project
management, etc. A structured questionnaire was constructed and systematically distributed
during the period January and February 2019, based on simple random sampling technique.
The sampling frame consists of 101 front line employees’ respondents; five point Likert scale
was used. Skill sets considered for the study were Communication skill, Technical skill,
Problem Solving skill, Interpersonal skill and Decision Making skill. Instrument for the study
consists of 39 items, out of which 21 belong to Skills and 18 belong to performance.

Analysis and Interpretation results

Table 1: Results of Demographic factors: Gender, Age and Marital Status

Category Frequency Percentage

Male 49 48.5
Gender Female 52 51.5
Total no of respondents 101 100.0

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Below 25 years 85 84.2

26-35 years 14 13.9
Age 36-45 years 1 1
45 and above 1 1
Total no of respondents 101 100.0

Married 11 10.9
Marital Status Unmarried 90 89.1
Total No of Respondents 101 100.0

The table 1 describes the study sample characteristics. Of 101 respondents, 48.5% are male
and 51.5% percent are female. 84.2% of the respondents are below 25 years of age, 13.9% are
aged between 26 to 35 years, 1% of the respondents are from 36 to 45 years of age and 1% of
the respondents belong to the age group of above 45 years. 10.9% of 101 respondents are
married and 89.1% are unmarried.

Table 2: Results of Reliable Statistics

Cronbach’s Alpha Items

.910 39

The reliability of the constructs has been measured using Cronbach’s Alpha (Table 2). The
Alpha Value for the construct is 0.910, which indicates that all construct are reliable for
further analysis.

Table 3: Results of Mean of Communication, Technical, Problem Solving,

Interpersonal and Decision Making skills

Items Mean
1.I am able to express the ideas with clarity and precision 4.27
2.I am able to present ideas, concepts, plan and procedures clearly to the target 4.25

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group.
3.I am able to communicate with people from different cultural background. 4.35
4.I can be a better negotiator at times. 4.00
Average Mean of Communication Skill 4.22
1.I am aware of IT technology trends 4.01
2.I need more knowledge on technical aspect which is essential for my job 4.16
3.I am well versed with programming languages required to do my job. 3.91
4.I am aware of different tools used in the industry 3.78
Average Mean of Technical Skill 3.97
1.I am able to identify and analyze problems in a complex situation 4.00
2.I am able to find ideas and alternative solutions to the problems 4.21
3.I am able to make conclusions based on valid and logical proof. 4.06
4.I can manage change in my job very well whenever the situation demands. 4.04
Average Mean of Problem Solving Skill 4.08
1.I accept corrections and advises from the superiors and experts. 4.28
2.I can manage conflicts that could damage my relationship with others. 4.02
3.I am able to work systematically by taking my peers and team together 4.24
4.I am aware of workplace happenings and responds in a suitable manner to
situations 4.11
Average Mean of Interpersonal Skill 4.16
1.I give more importance to practicalities while making decisions in the job 4.07
2.I work out all pros and cons before making a decision. 4.09
3.I remain calm when I have to make decisions very quickly. 3.92
4.I enjoy making decisions. 4.15
5.I like to consult with others while decision making. 4.04
Average Mean of Decision Making Skill 4.05

Table 4: Result of Gap analysis of perceived and expected mean of all Skills

Average Mean Perceived Expected Gap

Communication Skills 4.22 4.7 -0.48

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Technical Skills 3.97 4.8 -0.83

Problem Solving Skills 4.08 4.6 -0.52
Interpersonal Skills 4.16 4.5 -0.34
Decision Making Skills 4.05 4.5 -0.45

Perceived, Expected and Gap of all the Skills

Perceived Expected Gap

4.7 4.8 4.6 4.5

4.5
4.22 3.97 4.08 4.16 4.05

-0.48 -0.83 -0.52 -0.34

-0.45

Graph 1: Perceived, Expected and Gap of all the Skills

4 items related to communication skills was measured. The assessment focused on

communication skills that influence employee’s performance. The average mean of
communication skill score is 4.22 with high mean score of 4.35 (item 3) and low mean score
of 4.00 (item 4) as shown in table 2. The expected mean score for communication skills is
4.7. The study showed a gap of -0.48 in the expected and actual communication skill of
Sanria Engineering and Consulting Pvt Ltd employees as shown in table 4 and graph 1.

4 items related to technical skills was measured. The assessment focused on technical skills
that influence employee’s performance. The average mean of technical skill score is 3.97 with
high mean score of 4.16 (item 2) and low mean score of 3.78 (item 4) as shown in table 2.
The expected mean score for technical skill is 4.8. The study showed a gap of -0.83 in the
expected and actual technical skill of Sanria Engineering and Consulting Pvt Ltd employees
as shown in table 4 and graph 1.

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4 items related to problem solving skills was measured. The assessment focused on problem
solving skills that influence employee’s performance. The average mean score of problem
solving skill is 4.08 with high mean score of 4.21 (item 2) and low mean score of 4.00 (item
1) as shown in table 2. The Expected mean score for problem solving skill is 4.6. The study
showed a gap of -0.52 in the expected and actual problem solving skills of Sanria Engineering
and Consulting Pvt Ltd employees as show in table 4 and graph 1.

4 items related to interpersonal skills was measured. The assessment focused on interpersonal
skills that influence employee’s performance. The average mean score of interpersonal skill is
4.16 with high mean score of 4.28 (item1) and low mean score of 4.02 (item 2) as shown in
table 2. The expected mean score for interpersonal skill is 4.5. The study showed a gap of -
0.34 in the expected and actual interpersonal skills of Sanria Engineering and Consulting Pvt
Ltd employees as shown in table 4 and graph 1.

5 items related to decision making skills was measured. The assessment focused on decision
making skills that influence employee’s performance. The average mean score of decision
making skill is 4.05 with high mean score of 4.15 (item 4) and low mean score of 3.92 (item
3) as shown in table 2. The expected mean score for decision making is 4.5. The study
showed a gap of -0.45 in the expected and actual decision making skills of Sanria Engineering
and Consulting Pvt Ltd employees as shown table 4 and graph 1.

To sum up, the average perceived skill is less than the expected. The mean score of perceived
skill ranged from 3.97 to 4.22 with high average score of 4.22 in communication skill and low
average score of 3.97 in technical skill. The mean expected skill ranged from 4.5 to 4.8 with
high mean score 4.8 in technical skills and low means score of 4.5 in interpersonal and
decision making skill. From the above, results can be inferred that technical skill is very
important in improving the performance of employees in workplace.

Table 5: Results of Correlation between Performance and Skills

Skills
Pearson Correlation .569
Performance Sig. (2 tailed) .000
N 101

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Table 6: Results of Correlation between Performance and Communication,

Technical, Problem Solving, Interpersonal and Decision Making Skills.

Communicati Technical Problem Inter Decision

on Skills Skills Solving personal Making
Skills Skills Skills
Pearson
.434 .263 .485 .447 .561
Perform Correlation
ance Sig. (2 tailed) .000 .000 .000 .000 .000
N 101 101 101 101 101

Table 5 shows the relationship between performance and skills of 0.569 indicating moderate
and positive performance, confirming an increase in skill, performance may also increase.
The relationship between performance and communication, problem solving, interpersonal
and decision making skills is positive and moderate that is 0.434, 0.485, 0.447 and 0.561
respectively. Beside the positive but low technical skill that is 0.263 as shown in table 6,
confirms that enhanced technical skills may not help to improve performance.

Table 7: Results of Regression on Performance and Skills

Model R R Square Adjusted R Std. Error of the

Square Estimate
1 .569 .324 .317 .31211

Table 8: Results of mean difference of Performance and Skills using ANOVA

Sum of Mean
Model Df F Sig.
Squares Square
Regression 4.624 1 4.624 47.470 .000
Residual 9.644 99 .097
Total 14.268 100

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Table 9: Results of Coefficients: Performance and Skills

Model Unstandardized Standardized t Sig.

Coefficients Coefficients
B Std. Error Beta
(Constant) 2.086 .314 6.649 .000
Mean_Skil .526 .076 .569 6.890 .000
l

Table 10: Results of Coefficients: and Communication, Technical, Problem

Solving, Interpersonal and Decision Making Skills

Model Unstandardized Standardized T Sig

Coefficients Coefficients
B Std. Error Beta
(Constant) 1.848 .324 5.711 .000
Communication Skills .208 .082 .244 2.538 .013
Technical Skills -.136 .064 -.220 -2.118 .037
Problem solving Skills .186 .081 .258 2.300 .024
Interpersonal Skills .055 .082 .072 .675 .501
Decision Making Skills .262 .066 .391 3.964 .000

Table 11: Ranking of Skills based on its impact according to regression

analysis

Skills Sig. Beta Rank

Decision Making Skills 0.000 0.391 1
Problem Solving Skills 0.024 0.258 2
Communication Skills 0.013 0.244 3
Technical Skills 0.037 -0.220 4

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The regression analysis on skills and performance found to be significant and the impact of
skills on performance is 32.4% as shown in table 7. This will have positive impact on
performance showing an improvement in skills. Three skills out of five skills considered for
the study, based on results of multiple regression, shows a significant impact on performance
as shown in table 10. Decision making skill has the greatest impact (Beta=0.391) followed by
problem solving skill (Beta= 0.258) and communication skill (Beta=0.244). The study finding
shows that technical skill have negative impact on performance (Beta= -0.220). This indicates
that soft skills competency is important in improving job performance rather than hard skills.
Since correlation result of this study shows that all skills have positive relationship with
performance inferring hard skill competency are more important for the job at the entry level
and soft skills competency are important in enhancing performance of the job. The company
therefore needs to take steps to improve employees’ skills gap determinants.

Conclusion: The purpose of the study is to provide the organization a continuous attempt to
optimally enhance the front line employee’s performance of the organization using available
human resource. The research confirms that at Sanria Engineering Pvt ltd there is a skill gap
between expected and the actual skills of the workforce. Findings from studies showed
statistically that there is relationship between the skills considered for the study such as
technical skills, communication skills, interpersonal skills, and decision making skills and had
an impact on the performance of the employees expect technical skills. Results can therefore
be inferred as technical skill has a minimal role improving the performance of the front line
employees in designing industry as majority of the work is done by machines. The regression
results provide evidence that technical skill alone may not improve performance of employees
and interpersonal skill even important for performance of frontline employees, may not
impact the enhanced performance. So organization should therefore take necessary initiation
to correct the skill gap factor of employees of the organization to achieve the objectives.

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