Developing human capital by linking emotional intelligence with personal competencies in Indian business organizations

Singh, Kavita Article Developing human capital by linking emotional intelligence with personal competencies in Indian business organizations International Journal of Business Science & Applied Management (IJBSAM) Provided in Cooperation with: International Journal of Business Science & Applied Management (IJBSAM) Suggested Citation: Singh, Kavita (2010) : Developing human capital by linking emotional intelligence with personal competencies in Indian business organizations, International Journal of Business Science & Applied Management (IJBSAM), ISSN 1753-0296, International Journal of Business Science & Applied Management, s.l., Vol. 5, Iss. 2, pp. 29-42 This Version is available at: https://hdl.handle.net/10419/190615 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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Journal of Business Science and Applied Management, Volume 5, Issue 2, 2010 Developing human capital by linking emotional intelligence with personal competencies in Indian business organizations Kavita Singh Faculty of Management Studies, University of Delhi Delhi–110007, India Tel: ++91-11-9810784874 Email: [email protected] Abstract The concept of emotional intelligence has become so popular in the management literature that it has become imperative to understand and leverage it for the sake of enhancing the capacity of human capital in organizations. As the pace of change is increasing and world of work is making ever greater demands on a person‟s cognitive, emotional and physical resources, this particular set of abilities are becoming increasingly important. Since majority of the concerns in organization involve people in different roles, emotional intelligence must become a determining factor for their effective management. It has also been found that ultimately it is the emotional and personal competencies that we need to identify and measure if we want to be able to predict performance at workplace resulting in its effectiveness, thereby enhancing the worth of the human capital. In this scenario the competencies possessed by the people will have a bearing on the extent to which they can actualize their emotional intelligence. The current paper sets out to examine the relationship between the emotional intelligence of executives in Indian business organizations with their personal competencies. The result suggests that emotional intelligence is significantly related with the personal competencies of employees and the variables of personal competency namely, people success, system success and self success have a predictive relationship with emotional intelligence. Keywords: emotional intelligence, personal competencies, self success, people success, task success, system success Int. Journal of Business Science and Applied Management / Business-and-Management.org 30 1 INTRODUCTION James Dozier discovered the power of emotional intelligence in 1981, which resulted in saving his life. Dozier was a U.S. Army Brigadier General who was kidnapped by the Red Brigades, an Italian terrorist group. During the initial days his captives were euphoric with excitement and were agitated and irrational at times and he felt that his life was in danger. To save himself, he remembered something he had learned about emotion in an Executive Development Program at the Center for Creative Leadership in Greensboro, North Carolina. Emotions are contagious, and a single person can influence the emotional tone of a group by modeling. He first thought of getting his own emotions under control, quite a difficult task to achieve! He tried to calm himself and conveyed his calmness to his captives through his actions. He then realized that his captors also caught his calmness and became more rational. In retrospect when Dozier looked back on this episode, he was convinced that his ability to manage his own emotional reactions and those of his captors literally saved his life (Campbell, 1990). The term emotional intelligence (EI) had not been coined in 1981, but James Dozier actually experienced it live and gave us an initial framework to identify what it is: “The ability to perceive and express emotion, assimilate emotion in thought, understand and reason with emotion, and regulate emotion in the self and others” (Mayer, Salovey, & Caruso 2000). Dozier could perceive accurately the emotional reactions of his captors, and he also diagnosed the danger that those reactions posed for him. By regulating his emotions and then expressing them effectively, he was able to manage the emotions of his captors. This incident illustrates emotional intelligence in action. Since then the concept of emotional intelligence has become so popular in the management literature that it has become imperative to understand and be aware of the research and theory on which it is based. It is also useful to consider how emotional intelligence is important for effective performance at work place. As the pace of change is increasing and world of work is making ever greater demands on a person‟s cognitive, emotional and physical resources, this particular set of abilities are becoming increasingly important. Traditional measures of intelligence, although providing some degree of predictive validity, have not been able to account for a large portion of the variance in work performance and career success. As Goleman (1998) states, "When IQ test scores are correlated with how well people perform in their careers the highest estimate of how much difference IQ accounts for is about 25 percent (Hunter & Hunter, 1984; Schmidt & Hunter, 1981). A careful analysis, though, suggests that a more accurate figure may be no higher than 10 percent and perhaps as low as 4 percent" (Sternberg, 1997). The Impact of Emotional Intelligence on Workplace Effectiveness Look deeply at almost any factor that influences work place effectiveness, and you will find that emotional intelligence plays a role. Any growing and prosperous organization needs to retain good employees, particularly those with the competencies that are important in the high-tech economy. What is it that can make an employee stay with an organization for a longer duration? A Gallup Organization study of two million employees at seven hundred companies found that duration of stay of an employee in a company and his productivity would be determined by his relationship with his immediate supervisor (Zipkin, 2000). In another study by Spherion, a staffing and consulting firm in Fort Lauderdale, Florida, and Lou Harris Associates, it was found that only 11 percent of the employees who ranked their bosses as excellent were likely to look for another job, however, 40 percent of those who ranked their bosses as poor wanted to leave. In other words, people who have good relation with boss are four times less likely to leave than are those who have poor relationship (Zipkin, 2000). The greatest challenges that the organizations face today include (Cherniss, 2001):  Coping with massive, rapid change.  Employees need to be more creative in order to drive innovation.  Managing huge amounts of information.  Enhancing customer loyalty.  Employees need to be more motivated and committed.  Need for collaborative effort.  The organization needs to make better use of the special talents available in a diverse workforce.  The organization needs to identify potential leaders in its ranks and prepare them to move up.  The organization needs to identify and recruit top talent. Kavita Singh 31  The organization needs to make good decisions about new markets, products, and strategic alliances.  The organization needs to prepare employees for overseas assignments. These and many more concerns today confront work organizations, both public and private. Since majority of these concerns involve people in different roles, emotional intelligence must become a determining factor for their effective management. And in virtually every case, emotional intelligence must play an important role in handling the concern. For instance, while dealing with the process of change in an organization a lot of emotions get generated which may range from very positive to very negative (Singh, 2005). This requires ability on the part of both the employer and the employees to perceive and understand the emotional impact of change on self and others. To be effective in helping their organizations manage change, leaders should be aware of and manage feelings of anxiety and uncertainty of their employees (Bunker, 1997). They also should be able to appreciate the emotional reactions of other employees and help them to cope up with change. Besides the leader, the other members of the organization should be also able to monitor and manage their own emotional reaction as well as of their colleagues. Ultimately it is these social and emotional competencies that we need to identify and measure if we want to be able to predict performance at workplace resulting in its effectiveness. 2 LITERATURE REVIEW Emotional Intelligence Salovey and Mayer (1990) coined the term emotional intelligence in 1990, while being aware of the previous work on non-cognitive aspects of intelligence. They described emotional intelligence as "a form of social intelligence that involves the ability to monitor one‟s own and others‟ feelings and emotions, to discriminate among them, and to use this information to guide one‟s thinking and action”. In the early 1990‟s Daniel Goleman became aware of Salovey and Mayer‟s work, and this eventually led to his book on Emotional Intelligence. Goleman proposes that cognitive skill 'can help you get a job' in a company, but emotional skill helps you „grow in the job‟ once you‟re hired. To illustrate Goleman‟s point, psychologist Stein and Book (2006), marketers of tests that assess employees‟ emotional intelligence quotient (EQ), cite the example of a Harvard business graduate who received numerous job offers from companies clamoring to hire her. However, due to a lack of emotional intelligence, the woman continually sparred with her employers and couldn‟t keep any of the jobs. Goleman (1998) concludes by stating that 'Emotional intelligence matters twice as much as technical and analytic skill combined for star performances. And the higher people move up in the company, the more crucial emotional intelligence becomes.' To rise higher in one‟s professional competence at the workplace, it is not just essential that individuals are good in their jobs. They are required to be more positive, approachable, warm, empathetic and optimistic. A number of studies in the area suggest that it takes more than traditional cognitive intelligence to be successful at work. The emotional intelligence of the person which include his ability to restrain the negative feelings and focus on positive feelings plays an important role in determining his success The idea got further boost with the release of a book by Daniel Goleman, 'Emotional Intelligence: Why it Can Matter More than IQ,' (1995). In another book, 'Working With Emotional Intelligence', Goleman (1998) focused on the need for emotional intelligence at work, an area often considered more head than heart. The notion does not remain limited to the managers and leaders of the organization but any job that requires dealing with people would require the input of emotional intelligence. Also, whereas IQ is relatively fixed, emotional intelligence can be built and learned. Companies can test and teach emotional intelligence, and many employers are already beginning to do so. For the purpose of the present study, emotional intelligence has been discussed with the help of following dimensions: Self Awareness: Self-awareness is being conscious of and being able to connect with our personal feelings, thoughts and actions. This helps a person get a clearer perception of what he wants to achieve in life and therefore be able to work on his level of competencies. Self-awareness may also include some degree of self-disclosure so that we can develop effective relationship with other people around us and lead a more fulfilling life by sharing and receiving information. Commitment: True commitment is a virtue and a personal trait that is learned very early in life. Being committed is a state of mind and is determined by number of factors. It is based on one‟s own personal choices as well as the expectations from other people around us. It is also determined by the Int. Journal of Business Science and Applied Management / Business-and-Management.org 32 quality of relationship we share with people, groups, organizations or tasks that we are supposed to be committed to be. Resilience: Resilience refers to one‟s ability to adjust well in adverse stressful and crises situations. It is the ability to perform well and consistently in a range of situations and when under pressure. The degree of resilience can vary amongst individuals from being high to low on resilience. A number of factors determine a person‟s ability to be resilient even in adversities. These include age, gender, and frequent exposure to stressful situations. Optimism: Optimism is defined as an approach in life where a person has a positive belief that good things will happen independent of one's ability. It could be the result of both the inherited characteristics as well as experience. Some of us are naturally inclined to be positive thinkers and therefore optimistic while few of us also acquire it through social interaction. Companies, as well as individuals, create their own internal expectations of optimism or pessimism. The attitude starts with the basic belief in things around us - good or bad. Compassion: Compassion has been defined as awareness about the suffering of others and a desire to relieve that suffering. It is a kind of emotion: a feeling in motion. In addition to the wish to help the other person in distress it may also involve taking actions and making efforts to help them overcome it. It is an active feeling. When a feeling is active, it can be used as a tool. As a tool, it can be used in a positive or negative manner. Interpersonal Connectivity: Interpersonal connectivity can be described as an ability to develop effective relationship with other people around you and get along with them both in personal and professional lives. The success of this connectivity would be determined by the response from the other party. Personal Integrity: Personal integrity refers to a quality of a person's character. This includes being honest with oneself as well as with others around you. It also involves being responsible for what you seek and undertake in life and being able to own up one‟s own faults in cases of failure. It encompasses the concept of wholeness, intactness and purity about one‟s thoughts, feelings and actions. Emotional Regulation: Emotional regulation is the ability to regulate one‟s emotions whenever required. It may be required to either enhance or reduce one‟s emotion according to the demands of the situation. Emotional regulation can also be described as a range of skills that are instrumental in keeping the emotional system healthy and functioning. It includes being able to recognize the emotional response and understand it; accept the response as being your own; identify strategies to reduce or enhance the intensity of the emotions; and engage in the goal directed behaviour. 3 PERSONAL COMPETENCIES According to Boyatzis (1982), competence means different things to different people. However, it is generally accepted as encompassing knowledge, skills, attitudes and behaviours that are causally related to superior job performance. This understanding of competence can be either described on the basis of attribute-based inference (Gonczi & Hager, 1992) or on the basis of performance-based approach which demonstrates performance at pre-defined acceptable standards in the workplace (Gonczi et al., 1990). The definition of "competency" adopted from Parry's (1998) work includes a multi-dimensional approach to understand competency. According to this definition competency:  is "a cluster of related knowledge, attitudes, skills, and other personal characteristics that affects a major part of one's job,  correlates with performance on the job,  can be measured against well-accepted standards,  can be improved via training and development and  can be broken down into different components". The major components of competencies include: abilities, attitudes, behaviour, knowledge, personality and skills. Another definition of "personal competency" which has been adopted from Finn (1993) and Crawford (1997) states that personal competency is "the core personality characteristics underlying a person's capability to do a project. These are behaviour, motives, traits, attitudes, and self concepts that enable a person to successfully manage a project". According to Spencer and Spencer (1993) the six components of competency are:  Achievement and action: This competency consists of achievement orientation; concern for order in quality and accuracy; initiative and information seeking. Kavita Singh 33  Helping and human service: This competency implies that the manager has customer service orientation and interpersonal understanding.  Impact and influence: This competency comprises impact and influence capability; organisation awareness and relationship building.  Managerial competency: This competency includes teamwork and cooperation; capability in developing others; team leadership and directiveness, assertiveness and positional power using.  Cognitive: This competency implies that the manager has both analytical thinking capability and conceptual thinking ability.  Personal effectiveness: This competency covers self-control; self-confidence; flexibility and organizational commitment. Considering the understanding of a number of corporate giants, such as, AT & T, Chevron, Citicorp, General Electric, Honeywell and Pepsi-co, Ryback (1998) has proposed seven core competencies of today‟s successful managers:  Strategic planning  Communication and alignment  Team building  Continuous learning  Dynamic accountability  Systematic results  Actualized integrity 4 LINK BETWEEN EMOTIONAL INTELLIGENCE AND PERSONAL COMPETENCIES As a person makes a transition from the transactional to transformational approach to create a necessary socio-emotional nearness with people around him, the trait of emotional intelligence becomes a reality. The resultant strengthening of bonds between the individuals help both parties to establish trust and mutuality based on common interests, goals, and a sense of mission, creating the necessary conditions for achievement of personal and organizational goals. Essentially, in order to connect the individual has to bring into play certain personal, social and organizational competencies in mutually acceptable combinations for achieving organizational excellence. Thus, emotionally intelligent behaviour addresses the basic issues for bringing workplace effectiveness and helps to attain higher levels of organizational growth and excellence. This essentially aids in the process of developing congenial work environment in the organization leading to efficiency at the workplace and development and enhancement of human capital. Recently, some of the American companies have started concentrating on this dimension of the human being. It deals with those ultimate human capacities and potentialities, which have a significant impact on the various aspects of organizational climate. Enrichment of the emotional dimension would help to solve behavioural problems arising from material and social dimensions and contribute to the true effectiveness of an organization (Elankumaran et.al, 2005). With the opening up of the Indian economy through liberalization, privatization, globalization and natural thrust towards information technology the tasks of Indian business executives has become more demanding. The challenges get multiplied when the Indian executives have to work in diversified work cultures. The workforce diversity has not only offered the emotional stability to the executives but has also come on the way of leadership behaviour and effectiveness (Punia, 2004). Technology represents only 5% of the transformation process; the other 95% of a company‟s metamorphosis is represented by the changes in organizational behaviour and culture that are the heart of leadership. The emotional intelligence intervention is partly a response to the problems that businesses face today. There is a need to develop the highest standard of leadership skills, the challenges of high team turnover, ever increasing demands of customers for high quality goods and services, rapidly changing business environment, economic demands or escalating costs. What companies need is people who have both technical knowledge and social and emotional abilities which will enable them to delight the customers. Emotional intelligence can contribute to developing those skills and abilities that are linked with this aspiration (Orme & Langhorn, 2003). Personal competencies play a very vital role in influencing the emotional intelligence of employees in organizations. Int. Journal of Business Science and Applied Management / Business-and-Management.org 34 For the purpose of present study following four dimensions of personal competencies have been identified:  People success  Task success  System success  Self success People Success: This competency involves understanding behaviour in interpersonal context, where people refer to connectivity and building bridges with others for attaining and maximizing common goals. Interactivity denotes interrelationship among people and refers to how they relate to one another. Empathy, service and organizational awareness are corner stones of social connectivity. Emotional intelligence is becoming crucial in the context of individual‟s behaviour within the organizational context. With the flattening of the organization structure, the span of control is now larger for the leader who has to adapt emotionally intelligent behaviour to generate people success. In a study by Singh (2007), it was found that the relationship dimension of individual behaviour is important to be effective leader and adds to his success. Jordan and Troth (2004) also found that emotional intelligence was directly related to performance at group level and emotions are important contributing directly to team performance. Thus the following hypothesis is proposed: Hypothesis 1 (H1): Emotional intelligence is significantly related to people success. Task Success: This competency refers to the ability of the individual to focus on the current task in hand and try to do it with utmost efficiency and accuracy. This will also involve the use of creative thoughts and innovative principles in handling the tasks more effectively. In a study by Lyons and Schneider (2005), it was found that certain dimensions of emotional intelligence were related to more challenge and enhanced performance, thereby increasing task success. Lopes et. al. (2006) found that employees high on emotional intelligence received greater merit increases and held higher company rank than their counterparts. These employees also received better peer and/or supervisor ratings of interpersonal facilitation and stress tolerance. A study by Jaeger (2003) revealed a strong relationship between emotional intelligence and performance of employees leading to task success. On the basis of these findings the following hypothesis is proposed: Hypothesis 2 (H2): There is a significant positive relationship between Emotional intelligence and task success System Success: With this competency, individuals are focused on the organizational issues and the act of doing things together in the organizational context becomes a reality. The following processes occur with this competency in the organizations:  The person identifies the organizational and environmental variables that control his or her behavior.  The person works with others to discover the personalized set of environmental or organizational contingencies that regulate their behavior.  The individuals jointly attempt to build bonds to cultivate and maintain a web of relationships to produce more mutually reinforcing and organizationally productive outcomes. Sy, Tram and O'Hara (2006) reported managers' emotional intelligence had a stronger positive correlation with job satisfaction and job performance. Lyons and Schneider (2005) found that high emotional intelligence levels promote challenge appraisal and lead to better performance. It has been suggested in one of the studies that a link between the emotional intelligence and work place measure of effectiveness would lead to enhanced system success (Rosete & Ciarrochi, 2005). Thus the following hypothesis is proposed: Hypothesis 3 (H3): Emotional intelligence has a significant positive relationship with system success Self Success: This competency consists of self-awareness, which is the basic foundation on which emotionally intelligent behaviour germinates and refers to the ability to read one‟s own emotions and recognizing their impact to guide decisions. It is necessary for the individuals to have an accurate self assessment by knowing his/her own strengths and limitations (Self directed learning). A self directed Kavita Singh 35 learning leads to a positive evaluation of one‟s self worth and capabilities which are vital for one‟s success. Since emotional intelligence comprises both intra-personal and interpersonal abilities, the success of self is the key component of emotional intelligence. Stein and Book (2006) elaborated the concept of self as the ability to recognize one‟s feelings and to be able to differentiate between them, to know what you are feeling and also to know what caused that feeling. An emotionally intelligent person is able to do thereby leading to self success. Thus the following hypothesis is proposed: Hypothesis 4 (H4): Emotional intelligence is significantly related to self success. For the competencies to be effectively converted into developing an empowered workforce, the following steps are necessary to create an environment in which people can grow:  Focus on development should be well-communicated.  Individual should own up the responsibility for their own development and leaders should help them in providing with resources and support.  After an assessment of the strengths and weaknesses and therefore on the basis of competency gaps, individuals should be able to develop their development plans.  A deadline should be formulated to achieve the targets with proper feedback system in place.  A proper reward system needs to be developed to keep the employees of the organization motivated. 5 CONCEPTUAL FRAMEWORK The present study intends to determine the relevance of the concept of emotional intelligence to the business organizations and to explore the extent to which it may be possible to utilize this concept as a means of creating a sustainable competitive advantage by attracting, motivating, training and retaining customer conscious employees at all levels of the organization. The objective of the study is to develop a framework to identify the relationship between emotional intelligence and personal competencies of executives in Indian business organizations. The expected linkage between the dimensions of personal competencies and emotional intelligence are presented in Figure 1. The model (Figure1) below depicts the influence of personal competencies on emotional intelligent behaviour which is instrumental in enhancing the human capital in this emerging paradigm. In this theoretical construct the dimensions of personal competencies are the independent variables and emotional intelligence is the dependent variable. The model proposes to suggest that to develop an emotionally intelligent work force; personal competencies need to be promoted in business organizations. Int. Journal of Business Science and Applied Management / Business-and-Management.org 36 Figure1: Relationship between Personal Competencies and Emotionally Intelligent Behaviour 6 METHOD This section discusses sample size, data collection along with suitable statistical tests used for evaluating research hypotheses. Sample and Data Collection A total of 500 self-administered questionnaires were distributed at managerial level. Against the targeted sample of 500 questionnaires, 378 questionnaires have been collected and analyzed. Stratified random sampling was used to collect the data. The distribution of the questionnaire was done on the basis of suitability mostly by personal contact, e-mail and use of postal services. The concerned person was contacted through phone or email before sending the questionnaire. As the questionnaire was self explanatory, the respondents were asked to respond as per the instructions given in the questionnaire and were assured of confidentiality. A total of 378 correctly completed questionnaire were returned by the respondents. There were three sections of the questionnaire used to collect the necessary data. The first portion of the questionnaire inquired about the personal information of the respondents. The second portion focused on emotional intelligence (dependent variable) and consisted of 8 dimensions measured with the help of 40 items with the highest score being 200. The eight dimensions were: 1. Self awareness 2. Commitment 3. Resilience 4. Optimism 5. Compassion 6. Interpersonal Connectivity 7. Personal Integrity 8. Emotional Regulation The scales used in the questionnaire included the Likert Scale. The Likert scale uses a rating of 1 to 5, where 1 indicates „Strongly Disagree‟ and 5 indicates „Strongly Agree‟. The reliability statistics Cronbach Alpha was calculated to be 0.81 for the items. People success Task success System success Enhancement of Human Capital Emotionally intelligent behaviour Self Success H1 H2 H3 H4 Dimensions of Personal Competencies