Competence

The home environment is the most important factor that determines the level of self-esteem in children. If children have an uninvolved parent they may feel worthless and unwanted. Children raised by authoritarian parents may feel like nothing they do is good enough whereas a child raised by an authoritative parent may feel supported and genuinely loved. Regardless of the type of style a parent uses to raise their children it affects children's self-esteem.
Children also measure their feelings of adequacy with scrutiny to how they participate in behaviors that are looked on highly by peers and being accepted by their peers.

Competence is the task to gain is Erik Erikson's industry vs guilt stage. Competence is considered what children can do and often what is called confidence. Competence is the ability to dress oneself, write one's own name, make friends etc. Young children are concerned with being able to do the same things their parents can and about what a child believes they're capable of doing, whether that is a new skill or completing new tasks. It's about establishing a sense of purpose and empowerment.

A parent (or caregiver) can participate in a variety of activities to increase their child's competence. Basing expectations on what the child can do and keeping tasks related to the child's developmental age and experience builds a child's competence. Parents can teach and help their children to problem solve and support their children in trying new skills and attempting difficult tasks. Parents can acknowledge and praise their children's efforts, persistence and risk taking and teach their children that their efforts, persistence and risks are worth  it as they see for themselves that they can complete specific tasks and activities. Using direct language to communicate expectations to children, instructions and appropriate behavior is another thing parents can do to help develop their children's competence. Using direct language to give instruction and communicate expectations helps children understand in no uncertain terms what is expected according the the parents specific guidelines.

When adults redirect a child when inappropriate behavior is occurring, they need to be respectful and allow children to express their feelings and they need to tell the child why the behavior is inappropriate or unacceptable. For example, if a child hits a sibling the parents can say, " Ouch! That hurts (siblings name)." This is respectful to the child because the parent doesn't yell at them or make them feel bad for what they did, however, they do make it clear the behavior is unacceptable without causing the child to feel incompetent.