Modelling the influence of managerial competence on managerial performance in the Ghanaian banking sector

The importance of human resource for the success and growth of every organisation cannot be underestimated. Management is one of the most important human resource components for every organisation. Management provides the vision, direction, motivation and necessary resources, and the effectiveness and success of the leadership provided by every manager depends on their managerial competencies. Managerial competencies are the attributes (information, motivations and abilities) that enable managers to successfully carry out their duties. The major goal of management competencies is to preserve the necessary skills that ensure high-quality work and living, develop capacity to execute specialised jobs for self-fulfilment, and improve employees’ performance at work. Competent management reduces absenteeism, shirking and disruptive behaviours, and managerial competence directly affects employee performance leading to organisational performance. Managerial performance in banking relates to leadership and motivation but ultimately to meeting targets set for managers and banks (short and long term), ensuring progress and returns. The blend between leadership and motivation leading to performance is influenced by managerial competence, which may itself be shaped by behavioural, functional and job competencies per the holistic-domain theory. Prior studies have identified key competencies (communication, planning and organising, teamwork, customer focus) and, more recently, intrapersonal, interpersonal, leadership, technical and customer value management competencies. In Ghana, commercial banks face intense competition and recent performance challenges (licence suspensions, higher minimum capital, increased fraud), raising questions about managerial competencies. Although managerial competence is recognized as crucial, existing studies largely focus on small businesses or other sectors, often in developed economies, and seldom examine how managerial competence relates to managerial performance in the banking sector using advanced methods like PLS-SEM. This study addresses contextual, conceptual and methodological gaps by examining how managerial competence influences managerial performance among branch and operations managers in Ghana’s banking sector, drawing on the holistic-domain theory and considering behavioural, functional and job competency perspectives.

The study is anchored in Asumeng’s (2014) holistic-domain model of managerial competencies, which integrates behavioural, functional and job competency models (Cheetham & Chivers, 1996, 1998) and captures five key domains essential for managerial performance: technical/business competence, intrapersonal competence, interpersonal competence, leadership competence and career/mentoring (here treated as customer value management/customer focus). The model posits that a manager’s ability to exhibit particular competencies is influenced by behavioural and functional requirements and that different competency categories matter for performance. Technical or business competence relates to cognitive abilities and job-specific technical knowledge (planning, budgeting, forecasting, strategy, performance evaluation, meetings, reporting). While foundational, its sufficiency for managerial performance in banking is unclear, leading to H1: Technical competence significantly influences managerial performance in Ghanaian banking. Intrapersonal competence covers core self-evaluations (self-esteem, self-efficacy, internal locus of control, self-control, emotional stability/intelligence, integrity, resilience) and underpins job satisfaction and managerial success; debates persist about its importance relative to technical competence, motivating H2: Intrapersonal skills significantly influence managerial performance. Interpersonal competence encompasses initiating, building and maintaining relationships with peers, superiors and subordinates and is a key indicator of managerial effectiveness and performance (influencing welfare, satisfaction, commitment, citizenship behaviour). Evidence on leadership styles (e.g., autocratic effectiveness) complicates expectations; thus H3: Interpersonal competence significantly influences managerial performance. Leadership competence focuses on influencing, motivating and directing individuals and groups to achieve goals, emphasising persuasion, goal setting and team building. Given its potential to drive innovation and challenge the status quo, H4: Leadership competence significantly influences managerial performance. Customer focus/value management competence reflects understanding and satisfying customer needs, ensuring loyalty, managing risks associated with service expansions, and balancing economic and satisfaction considerations. In competitive banking environments, attracting and retaining customers is crucial; thus H5: Customer value management competence significantly influences managerial performance. Managerial performance is conceptualised via task performance, contextual performance, adaptive performance and counterproductive work behaviour (Koopmans et al., 2011), covering task completion/standards/expertise, initiative/enthusiasm/cooperation/commitment, adaptability/innovation/change-readiness, and negative behaviours such as absenteeism and misinformation.

Design: Quantitative approach with a cross-sectional survey design. Participants: 127 bank managers (branch managers and operations managers) from all sixteen administrative regions of Ghana, selected purposively to target knowledgeable respondents. Instrument: Questionnaire adopted from Apreku-Djan et al. (2022), with two parts: demographics and measures of managerial competence and performance. Measurement scale: 4-point Likert (1 = strongly disagree to 4 = strongly agree). Variables: Managerial performance measured via task performance, contextual performance, adaptive performance and counterproductive work behaviour. Managerial competencies measured with five constructs: technical/business, intrapersonal, interpersonal, leadership and customer focus/value management. Reliability/validity (pre-test): Cronbach’s Alpha values exceeded 0.70 for all variables (technical/business 0.891; intrapersonal 0.877; interpersonal 0.822; leadership 0.851; customer focus/value management 0.818; employee performance 0.886). Ethics: Ethical clearance granted by the Department of Business Studies, College of Distance Education, University of Cape Coast (on behalf of the IRB); ensured anonymity, informed consent, freedom to participate/withdraw, no harm, and confidentiality. Analysis: Partial least squares structural equation modelling (PLS-SEM) used. Preliminary PLS-SEM assessments: Outer loadings supported retained items; construct reliability and validity met thresholds (Cronbach’s alpha, rho_A, composite reliability ≥ 0.70; AVE ≥ 0.50). Discriminant validity achieved via HTMT and Fornell-Larcker criteria (values below thresholds). Collinearity: Inner VIFs below 3.30 indicated no multicollinearity.

- Sample demographics: Majority aged 36+ (36.5%), male (53.8%), married (48.1%), with >5 years managerial experience (69.2%). - Measurement model: Reliability and validity achieved for all constructs (e.g., composite reliability ≥ 0.899; AVE ≥ 0.611). Discriminant validity satisfied (HTMT and Fornell-Larcker criteria). No multicollinearity (inner VIFs ≤ 2.905). - Structural model: R-squared for managerial performance = 0.532 (adjusted 0.527), indicating the five competencies jointly explained about 53% of the variance in managerial performance. - Path coefficients to managerial performance (Mag Perf): 1) Customer focus/value management competence: β = 0.520, t = 10.639, p = 0.000 (strongest effect). 2) Interpersonal competence: β = 0.222, t = 4.674, p = 0.000. 3) Intrapersonal competence: β = 0.196, t = 3.371, p = 0.001. 4) Leadership competence: β = 0.172, t = 3.518, p = 0.000. 5) Technical/business competence: β = 0.078, t = 2.200, p = 0.028. - Relative importance (descending): Customer value management, interpersonal, leadership, intrapersonal, technical. All hypothesised relationships (H1–H5) were supported.

Findings confirm that managerial competencies significantly influence managerial performance among bank branch and operations managers in Ghana. Customer value management competence emerged as the most critical determinant, underscoring the centrality of understanding and addressing customer needs, ensuring satisfaction and loyalty, and managing customer-related risks in a competitive banking context. Interpersonal competence significantly enhances performance, highlighting the importance of initiating and maintaining effective relationships with subordinates, peers and superiors to drive individual and organisational outcomes. Intrapersonal competence (core self-evaluations such as self-efficacy, emotional stability, self-control) is positively associated with managerial performance, indicating that managers with stronger internal resources and resilience perform better. Leadership competence contributes significantly, suggesting that the ability to influence, motivate and direct teams toward organisational goals elevates performance. Technical/business competence, while significant, has the smallest effect among the competencies, implying that job-specific knowledge and cognitive skills are necessary but not sufficient drivers of performance relative to customer-centric and relational/leadership capabilities. Overall, the results support the holistic-domain theory of managerial competencies by demonstrating that multiple competency domains collectively shape performance, and they extend its application to the banking sector of a developing economy. The 53% explained variance indicates substantial, though not exhaustive, explanatory power, implying additional contextual and organisational factors also contribute to performance.

The study modelled how managerial competencies influence managerial performance in Ghana’s banking sector and found that all five competencies examined—customer value management, interpersonal, leadership, intrapersonal and technical—significantly and positively predict managerial performance. Customer value management was the most influential, followed by interpersonal and leadership, with intrapersonal and technical also important but relatively less impactful. Practical recommendations include prioritising these competencies in recruitment, selection, placement and promotion decisions for branch and operations managers, as well as targeted development through on-the-job and off-the-job training such as job rotation, coaching, understudy, management games and case studies. Human resource managers should deliberately groom successors with these competencies and ensure external hires possess appreciable levels of them. Future research could investigate additional organisational and contextual factors explaining the remaining variance in performance and explore longitudinal or experimental designs to strengthen causal inference.