How Employees' Perceptions of Competency Models Affect Job Satisfaction? Mediating Effect of Social Exchange

INTRODUCTIONIn today's competitive marketplace, firms in every industry are seeking new ways for gaining and sustaining competitive advantage. Human resource competencies are viewed as the critical resource behind a firm's core competencies, and, thus, competitive advantage (Redmond, 2011; Lawler, 1994; Nordhaug Gronhaug, 1994; Wright, McMahan McWilliams, 1994) In this context, firms' human resources management should focus on competencies for gaining and sustaining competitive advantage. In human resource management literature, competency is defined as "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" (Athey and Orth, 1999:216) Competency approach in human resources management is used as a tool for performance evaluation, career development, remuneration and dismissal decisions because competencies is considered to represent an area affecting behavior of individual performance and therefore business success. Hence competency models has gained a great deal of interest and seen as a method of directly focusing on the management system contributing to organizational success and sustainability (Dubois Rothwell, 2004; Levine, 1997) If employees' competencies, skills, ideas and labor are used effectively in business operations, output and efficiency in terms of business and job satisfaction in terms of employees will be positively affected. It is important both for employees and businesses that employees comprehending the necessity of competency based approach and employees perceptions about the fair applications of competency models for each employee. Employee's job satisfaction and organizational commitment will be positively affected if employee perceives his/her competencies assessed fairly, in this case both employee's and business performance will increase (Campion et. al. 2011) The relationship between employees and their organizations are basically conceptualized as a social and economic exchange. Social exchange relationship is emerged when the relationship between employee and organization rely on trust and a high degree of mutual obligation (Shore et. al. 2006) Research show that competency models have positive effects on employee performance and outputs providing transparency about objectives and performance measures set for employees and improving the consistency of human resources applications (Redmond, 2013; Ramlall, 2006) In contrast, there are studies examine the situations of competency models viewed as a source of tension for employees. In these studies, employees' lack of trust in management's strategies and the situations that employees fail to understand their individual fit within a competency framework are discussed. Thereby, the main object of this paper is to examine how employees perceive competency model relevance and fairness and this perception's effect on job satisfaction. In this context, mediating role of social exchange is investigated. For purposes of this study, first, prior theories and research focusing on competency models, job satisfaction and social exchange are reviewed. Second, research hypotheses are developed and research model is presented. Third, discussion of the methods and findings are explained in the light of the research conducted. Finally, discussion about the research results is stated expressly. concept of competency was developed in the 1960s incorporates elements such as leadership and superior performance. The concept of competency including behavior, knowledge and attitudes that enables creation of high performance level consistently and effectively is important for the sustainability of business (Cira Benjamin, 1998) Today competencies are a significant source of data relating to employees' qualifications at the individual level and in the business.