Global competitive pressures, liberalized economic policies, ever-changing customer expectations and technological advancement have put excessive demands on business organizations. In order to survive and thrive business organizations need to prepare themselves in such a way that they can anticipate future changes and pro-act to deal with them. In the endeavour of forecasting change in the environment, human capital of organizations will play very critical role. A central component of human capital is competence. Competence is one of the key elements of performance. People must have knowledge and abilities to perform their tasks. People or organizations should not commit to accomplish something if they have neither the skills nor the resources to do the same. Individual competence interacting with organizational, technological and process facets generates organizational performance. Realizing the importance of the construct of competence in individual and organizational performance, we have tried to examine the conceptualization of competence. We have also provided critical review of various classification schemes of competencies. Finally we have suggested strategies for fostering and nurturing competence.What is Competence?The term originates from the latin verb competere which means to be suitable. The concept was originally developed in psychology characterizing individuals ability to respond to demands placed on them by their environment (White,1959). More recently, work related competence has been defined as underlying characteristics of a person that results in efficient work performance. (Woodruffe, 1992).In literature, work related competence and skills are often used synonymously. Thus the definition of two terms analyzed here. Nelson and Winter (1982) define skills as capabilities for smooth sequence of coordinated behaviour that is ordinarily effective relative to its objective, given the context in which it no...
