Prepared for the Consortium for Research on Emotional Intelligence in Organizations by Cary Cherniss, Ph.D., Rutgers University.

The following 14 points build a case for how emotional intelligence contributes to the bottom line in any work organization. Based on data from a variety of sources, it can be a valuable tool for HR practitioners and managers who need to make the case in their own organizations.

A Top Performer is 12 Times More Productive

• In jobs of medium complexity (sales clerks, mechanics), a top performer is 12 times more productive than those at the bottom and 85 percent more productive than an average performer.

• In the most complex jobs (insurance salespeople, account managers), a top performer is 127% more productive than an average performer. (Hunter, Schmidt, & Judiesch, 1990)

• Competency research in over 200 companies and organizations worldwide suggests that about one-third of this difference is due to technical skill and cognitive ability while two-thirds is due to emotional competence. (Goleman, 1998)

• In top leadership positions, over four-fifths of the difference is due to emotional competence.

Sales People with High EI Increased Sales by $91,370 More than their Peers

• At L'Oreal, sales agents selected on the basis of certain emotional competencies significantly outsold salespeople selected using the company's old selection procedure.

• On an annual basis, salespeople selected on the basis of emotional competence sold $91,370 more than other salespeople did, for a net revenue increase of $2,558,360. Salespeople selected on the basis of emotional competence also had 63% less turnover during the first year than those selected in the typical way. (Spencer & Spencer, 1993; Spencer, McClelland, & Kelner, 1997)

Insurance Agents with High EI Increased Average Sale by $60,000

• In a national insurance company, insurance sales agents who were weak in emotional competencies such as self-confidence, initiative, and empathy sold policies with an average premium of $54,000.

• Those who were very strong in at least 5 of 8 key emotional competencies sold policies worth $114,000. (Hay/McBer Research and Innovation Group, 1997).

Division Leaders Outperformed their Targets by 15% to 20%

• In a large beverage firm that used standard methods to hire division presidents, 50% of those hired left within two years, mostly because of poor performance. When the company started hiring based on emotional competencies such as initiative, self-confidence, and leadership, only 6% of those hired left within two years.

• Furthermore, 87% of the executives selected based on emotional competence performed in the top third based on salary bonuses for performance of the divisions they led.

• In addition, division leaders with these competencies outperformed their targets by 15 to 20%. Those who lacked them under-performed by almost 20%. (McClelland, 1999)

Deficiencies in Emotional Intelligence Cause Poor Executive Performance

• Research by the Center for Creative Leadership has found that the primary causes of poor performance in executives involve deficiencies in emotional competence such as difficulty in handling change, inability to work well within a team, and poor interpersonal skills.

EI Training Helps Manufacturing Plant Exceed Productivity Goals by $250,000

• After supervisors in a manufacturing plant received training in emotional competencies such as how to listen better and help employees resolve problems on their own, lost-time accidents were reduced by 50%, formal grievances were reduced from an average of 15 per year to 3 per year, and the plant exceeded productivity goals by $250,000. (Pesuric & Byham, 1996)

• In another manufacturing plant where supervisors received similar training, productivity increased 17%. There was no such increase in productivity for a group of matched supervisors who were not trained. (Porras & Anderson, 1981)

Accurate Self-Assessment Leads to Superior Performance in Managers

• One of the foundations of emotional competence -- accurate self-assessment -- was associated with superior performance among several hundred managers from 12 different organizations. (Boyatzis, 1982)

The Ability to Handle Stress is Linked to Success

• Another emotional competence -- the ability to handle stress -- was linked to success as a store manager in a retail chain.

• The most successful store managers were those best able to handle stress. Success was based on net profits, sales per square foot, sales per employee, and per dollar inventory investment. (Lusch & Serpkeuci, 1990)

Learned Optimism Leads to Increased Sales of 37%

• Optimism is another emotional competence that leads to increased productivity. New salesmen at Met Life who scored high on a test of "learned optimism" sold 37% more life insurance in their first two years than pessimists. (Seligman, 1990)

Handling Your Emotions Well Facilitates Teamwork and Collaboration

• A study of 130 executives found that how well people handled their own emotions determined how much people around them preferred to deal with them. (Walter V. Clarke Associates, 1997)

Higher EI Means Higher Motivation for Sales Reps

• For sales reps at a computer company, those hired based on their emotional competence were 90% more likely to finish their training than those hired on other criteria. (Hay/McBer Research and Innovation Group, 1997)

Less Turnover With Sales People

• At a national furniture retailer, sales people hired based on emotional competence had half the dropout rate during their first year. (Hay/McBer Research and Innovation Group, 1997)

High EI is a Better Predictor of Success than IQ or Experience

• An analysis of 515 senior executives by search firm Egon Zehnder International revealed that those who were primarily strong in emotional intelligence were more likely to succeed than those who were strongest in either relevant previous experience or IQ. In other words, EI was a better predictor of success than previous experience or a high IQ.

• 74% of the successful executives studied were high in EI while only 24% of unsuccessful executives had high EI. The study included executives in Latin America, Germany, and Japan, and the results were almost identical in all three cultures.

Star Performer Competencies

• The following description of a "star" performer reveals how several emotional competencies (noted in bold) were critical in the success of Michael Lem worked at Tandem Computers.

Shortly after joining the company as a junior staff analyst, Michael became aware of the market trend away from mainframe computers to networks that linked workstations and personal computers (Service Orientation). Michael realized that unless Tandem responded to the trend, its products would become obsolete (Initiative and Innovation).

He had to convince Tandem's managers that their old emphasis on mainframes was no longer appropriate (Influence) and then develop a system using new technology (Leadership, Change Catalyst). He spent four years showing off his new system to customers and company sales personnel before the new network applications were fully accepted (Self-confidence, Self-Control, Achievement Drive). (from Richman, L. S., "How to get ahead in America," Fortune, May 16, 1994, pp. 46-54