Egidio da Costa and Niu Xiongying
The Role of Human Resources Competency on SMEs Performance in Timor – Leste 1206
From the different interpretations found by different researchers, it is understood that
the performance of SMEs requires a measure to determine the level of success or
achievement of the company's performance. If the individual's performance is good, surely
the company's and the organization's performance will be better. A variety of indicators
can be used to analyze and measure the company's performance and determine how the
company achieves its strategies through its employees.
Gitosudarmo (2001) revealed several indicators used to measure the performance of
a business unit, including the amount of revenue earned, growth rate, competitive
advantage, company independence, and corporate image. Munizu (2010) also suggests a
few ways to measure the performance of a small or medium-sized enterprise (SME). These
are: capital sales growth, labor force growth, market growth, and profit growth. Zaenal In
Rusdi (2016) further stated that several indicators that can be used to measure the
performance of an SME, namely: profit growth, number of customers growth, sales
growth, and assets growth.
A similar idea has also been added by Soleh (2008) who says that the growth rate of
firms is measured by examining the increase in income, labor force, and consumers using
their products. Hadjimanolis (2000) also mentions a number of indicators to see and
measure the growth rate of a business, especially small businesses, such as an increase in
employees, profit, and the ratio of return on assets. From the number of indicators above
showing performance, it can also be seen that there are a number of factors that can affect
the performance of small and medium enterprises.
A According to Minuzu (2010), there are two types of factors that affect the
performance of SMEs, namely internal and external factors. Internal factors consist of
aspects related to human resources, financial aspects, production aspects, operational
techniques, and marketing aspects. External factors also consist of government policies,
socio-cultural, and economic aspects, as well as the roles of relevant agencies. Anggadwita
and Mustafid (2014) found that the performance of small and medium-sized businesses is
also affected by a number of factors, including entrepreneurship, human resource
competence, innovation, and sustainability.
A. Human Recourses Competence
Competency is defined as the ability to perform tasks in the workplace, including
the application of skills supported by knowledge (cognitive) and ability in accordance with
the required conditions. Thus, standards of competence can be seen as formulating skills
and talents that human resources (HR) must possess to perform a function in accordance
with the requirements that are defined or agreed upon. That competence is part of a deep
personality and is associated with a person with predictable behavior in various jobs and
tasks. Meanwhile, according to Utami et al. (2017), the concept of competence is the main
determinant for a person to achieve outstanding performance. Dessler (2009) also found
that competence is an individual trait that can be considered, including knowledge, skills,
and behaviors that can lead to performance and success. The same statement was also
put forward by Mondi (2008), which states that competence is a set of technical
knowledge, quality, and behavior related to human skills or understanding of company
policies.. Sutrisno (2009) adds that competence is an ability based on skills and knowledge
that is supported by work attitudes and their application in carrying out tasks and working
in certain workplaces. The indicators of HR competence in this study were obtained based
on research by Ardiana et al. (2010), namely skills, knowledge and abilities. Furthermore,
the components of competence can be understood from various aspects, including skills,
knowledge and behavior (Dessler, 2009). As indicators of competence according to
Fadillah et al. (2017) namely nature, self-concept, knowledge, skills, and motivation