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urchrlex: If your boss tells you that you are incompetent in your job infront of other staff what will u do?

I would prove to him and the staff that I'm competent and clear his doubt.

Your boss tells u that u r incompetent and doesn't sack you? That is proof that he still needs ur services. Banks use that line a lot to motivate staff, even if it is -ve motivation. Don't take it too personal unless if ur pride is stronger than ur paycheck. Calm down, look at the situation objectively, appraise what warranted the statement, be responsible for ur own part and if u r good, prove it, but not spitefully. Remember, u r still growing in ur career and need to be longterm in ur responses.

If he didn't sack you, it means he believes that you are not using your potential well, proof him wrong

prove to him otherwise if you still have a chance...
that is if you are indeed competent

Your boss still values ur services but he is expecting you to do more.

Op sentiment aside are you really competent in your job? You`re even lucky to have a boss like that my former employer will curse you and your family from any little mistakes.