The Relationship Between Skills and Performance

A common misunderstanding in the performance discourse is that the relationship between skill and performance is directly proportional. For instance, one basic misconception is the idea that if an employee has higher skills, then they can achieve better performance than someone with lower skills. But, the reality as we will examine is much more complicated.

On a deeper level, the relationship between these two concepts unfolds in a multi-dimensional level and the interconnections are not always clear. The interpretation of skills in reference to the growth of the national economy has its roots in the work of thinkers, back in the 18th century. Adam Smith approached the concept of skill in relation to the concept of labor. Thus, skill is interpreted as a labor force that has the potential to contribute to the wealth of a nation.

Today, the link between skills and performance has gained significant importance. One of the basic reasons is that governments are investing in the development of interpersonal and professional skills.


To a great extent, defining skills is currently based on the acceptance of some fundamental principles, the roots of which lie back in history in the work of Adam Smith in the 18th century. More specifically, skill is perceived in relation to some elements:

  • As a characteristic of the individual, something that a person has.
  • As the professional demands which are not identical with one’s individual skill.
  • Skill as the interconnected and sometimes conflict relations between workers and their organization.
  • Skill as the policies promoted by an organization for the optimal performance of the labor force (Grugulis, 2007).

Moreover, various theoretical approaches have been developed in order to understand and interpret the link between skills and performance. One of the most recognized theories is the social capital theory. However, there also some theories, such as human capital theory, internal market theory etc. that offer alternative approaches towards the links between resources and performance.

The existence of various theoretical approaches underlined that the link between skills and performance depends on the variables towards their “local” or “global” context.  Considering the above, further examination on specific case studies is needed. Researchers need further material in order to understand how the nature of skills unfolds on humans and organizations.

Grugulis, I. Stoyanova, D. (2010), “Skill and performance”, British Journal of Industrial Relation 49(3): 515-536

Author: Marilena Papageorgopoulou

Born in Athens, Greece. M.Sc. in Human Resource Management and Training at the University of Leicester. My goal is to enable business success through human resources management. Job design, recruitment, training & development initiatives are some aspects of my daily business plan.

Share This Post On
468 ad