Interrelationship between Emotional Intelligence, Transformational Leadership and Organizational Performance
Keywords: Emotional Intelligence, Transformational Leadership, Organizational Performance
Background of the study
In the contemporary business environment, there has been a notable shift towards intense competitiveness and globalization. To this end, there is increased pressure for organizations to adapt and effectively respond to the changing environment. Furthermore, Bass, B and Bass, R. (2008) identify that technological advancements and increased competition puts significant pressure on the organization in the service sector to provide competitively exceptional services to customers in which employees should be capable of delivering and performing at high standards that meet or exceed expectations. Abdulkarim (2013) emphasizes that taking this into account, Human Resource Development (Human Resource Development) has become one crucial area of focus for organizations. Clarke (2010) in this context points out Emotional Intelligence (EI) as a significant domain in human resource development. The authors emphasize that emotional intelligence is a core variable that influences employees’ behavior and performance at work.
According to Tsaousis and Nikolaou (2001) EI has gained much traction and interest in the last decade among scholars, managers and educators. The authors emphasize that this interest is founded on the hypothesis that EI contributes in improving employee performance. Similarly, Walter, Cole and Humphrey, (2011) mention that often EI has been regarded with twice the importance given to technical expertise and intelligence quotient. Many researchers argue that work related outcomes; of employees such as job performance and job satisfaction are highly predictable when EI is put into consideration as a determining factor. Furthermore, Chuang, Judge and Liaw (2012) highlight that EI in a great tool for resolving conflicts and reading the emotions of others. In turn, the capability of employees to manage and control their emotions is considered a key determinant as to whether an organisation will be successful or unsuccessful.
Many studies have been carried out on EI and its impact on different organisational factors, including its impact on job satisfaction, employee performance, growth of entrepreneurship, effective leadership and team performance (Northouse, 2012; Nunnally & Bernstein, 2010; Pool & Qualter, 2012; Bar-On, 2010; ). Fiori & Antonakis, (2011) study focuses on the impact of EI on effective leadership. The findings of the research indicate that a positive and significant relationship exists between EI and effective leadership. Batool (2013) study assessed the impact of EI on accuracy of self-awareness and leadership performance and the findings show that a negative relationship exists between EI and leader performance for leaders who overestimate their leadership abilities. On the other hand, research relating to leaders who underestimate their leader ability depicted a positive relationship between EI and performance of the leader. Cherniss (2010) study focused on the impact of EI on communication effectiveness with the primary focus on strategic alignment. The findings highlight that EI positively impact communication effectiveness, and in turn communication effectiveness positively influences strategic alignment in an organization. Other studies have focused on the relationship between EI and entrepreneurship. Case in point, Brunetto, Teo & Farr‐Wharton, (2012) identify that EI has a positive impact on the growth and success of enterprises.
Different studies have also focused on the impact or role EI plays in influencing performance, and notable areas of focus include employee performance, organizational performance, team performance and job performance. Farahani, Taghadosi & Behboudi, (2011) study focused on the impact of EI on job performance, whereby organizational commitment is a mediating factor. The scope of the research was narrowed down to the banking sector of Pakistan. In a similar light, Delcourt, Gremler & Van Birgelen (2013) focused on the relationship between EI and job performance with the mediating role of job satisfaction, of which a sample size of 354 employees at the University of Jordan was used. Brackett, Rivers and Salovey (2011) study consists of EI and employee performance as its key variables, whereby the research was based on findings obtained from public and private higher education organizations in Pakistan. Other studies such as Druskat, Mount and Sala (2013) and Brackett, Rivers and Salovey (2011) focused on the role EI plays in teams and team working. The findings retaliate and Farh, Seo and Tesluk, (2012) highlights that EI can be adopted to improve accurate and timely implementation of team tasks. In a similar, light Newman, Joseph & MacCann, (2010) identify that EI has a positive impact on team performance, and key attributes of performance assessed include involvement, effective communication, awareness and conflict management effectiveness.
Notably, extant research on EI has focused on varying variables, such as team performance, growth in entrepreneurship and communication effectiveness (Farh, Seo and Tesluk, 2012; Shipley, Jackson & Segrest, 2010). Few studies focus precisely on the interrelationship between EI, Transformational leadership and organizational performance. In essence, more research in the context of the banking sector is significant in providing more insights on the relationship that exists between EI, Transformational leadership and organizational performance. Furthermore, most researches focus on other nationalities, such as Pakistan, Jordan and developed countries (Shipley, Jackson & Segrest (2010); Druskat, Mount & Sala, 2013; Joseph & Newman, 2010). This study seeks to fill the gap by focusing on varying contexts so as to assess whether the findings from the study are consistent with extant literature or they differ. To this end, the findings of the study will have managerial implications for business players in contemporary society. Furthermore, the findings can be used to provide insights on the subject matter in other industries, sectors and markets. Additionally, the study provides additional contributions to the discipline of leadership and organizational management, which can be used to inform other future studies.
Purpose of the study
The purpose of this study is to analyze the interrelationship between emotional intelligence, transformational leadership and organizational performance in contemporary business environments.
- To assess the role of emotional intelligence in organizational performance
- To investigate the role of transformational leadership in organizational performance
- To assess the relationship between emotional intelligence and transformational leadership
- To assess the relationship between emotional intelligence, transformational leadership and organizational performance
The concept of Emotional Intelligence
Farahani, Taghadosi and Behboudi (2011) highlight some of the original sources and theories of EI dated back to the 1970s and 80s and pioneered by Jack Mayer, Garner Harwed and Peter Salovey. The underpinnings of their theories are considerably similar, such as in the case of Mayer and Salovey who agree that EI is a form of intelligence that entails the capability to monitor the feelings and emotions of oneself and those of others (Brackett, Rivers, & Salovey, 2011; Druskat, Mount & Sala, 2013; Joseph & Newman, 2010). According to Shipley, Jackson and Segrest (2010) Emotional Intelligence (EI) refers to the conscious managing of a person’s emotions and those of others. Newman, Joseph and MacCann, (2010); Farh, Seo and Tesluk, (2012); Brackett, Rivers and Salovey (2011) provide Mayer and Salovey definition of EI as a person’s ability to not only monitor their feelings and emotions, but also discriminate among them and apply this understanding to guide their actions and thinking. The definition provides by Reuvken Bar On describes EI as a myriad of non-cognitive, that is social and emotional abilities, skills and competencies that influence a person’s ability to succeed in dealing with environmental pressures and demands (Rangriz & Mehrabi, 2010; Harms & Credé, 2010; Lee & Ok, 2012). Notably, the definition of EI is not conclusive and with continued growth in the field the definitions are constantly being amended (Farahani, Taghadosi & Behboudi, 2011).
Emotional Intelligence Models
In the past couple decade, scholars have theorized numerous models, which fall into three major categories namely the trait, ability and mixed models (Qualter, Gardner & Whiteley, 2012;
Joseph & Newman, 2010; Mayer, Caruso & Salovey, 2016). The primary difference in the models is the innate competence in people that can be improved or developed systematically with time (Qualter, Gardner & Whiteley, 2012). Mayer, Caruso & Salovey (2016) highlight that the diffrences in the models arise in the measurement of EI, which mainly vary in the strict ability testing in subjective self-reporting method of measurement. Models of EI comprise Salovey and Mayer Four-Branch Ability Model (Petrides, 2010); Bar-On Mixed Model (Bar-On, 2010); and Goleman’s new Mixed Model (Moon & Hur, 2011).
Fiori and Antonakis, (2011) describe the four branch model by Mayer and Salovey as an ability model comprising four main areas; perceive emotions, use of emotion in thought, understanding of emotion and managing emotion. The model is founded on the perspective that there are some few and specific skills which affect effectiveness and accuracy in measures of EI. In precise, this entails an accuracy at understanding and perceiving emotional state of oneself and others and effectiveness in using, regulation and control of emotions appropriately (Pool & Qualter, 2012). Bar-on model comprises a myriad of interrelated social and emotional competencies, behaviours and skills (Bar-On, 2010; Batool, 2013). Batool (2013) highlights that Bar-On model proposes measurement of EI along five key composite scales embedded in the Emotional Quotient-Inventory, which are Intrapersonal EQ, Stress Management EQ, Interpersonal EQ, Adaptability EQ and the General Mood EQ. Bar-On model focuses on the potential for success and performance, rather than success or performance itself, which highlights its orientation towards the process rather than the outcome (Batool, 2013). Goleman’s contemporary mixed model of EI encompasses four dimensions namely self-awareness, self-management, social awareness and relationship management. The competencies and constructs of EI fall either under all four or one of the four categories that is the recognition of one’s emotions and those of others and the regulation of one’s and others people’s emotions. This study adopts Goleman’s Mixed model given that is more comprehensive in comparison to trait and ability. Notably, Cherniss (2010) highlights that ability models focus on mental abilities, the trait models focus on a person’s self-perceptions of emotional abilities, whereas mixed models combine both personality characteristics and mental ability (Cherniss, 2010; Van Rooy, Whitman & Viswesvaran, 2010).
The relevance of Emotional Intelligence
According to Srivastava (2013) EI is a critical factor that influences organizational effectiveness. To this end, the author carries out secondary data research to investigate the relationship between EI and organizational effectiveness. The study identifies that EI plays a significant role in enhancing organizational development, and that EI is a stronger predictor of life and work-life success than traditional parameters of measuring intelligence. The study identifies EI positive impact on key areas that depict organisational effectiveness, which include teamwork, employee recruitment, employee commitment, employee motivation, customer loyalty and quality of service. Similarly, other studies also support these findings, such as teamwork (Farh, Seo & Tesluk, 2012; Barczak, Lassk & Mulki 2010), employee recruitment (Godse & Thingujam, 2010; Goleman, Boyatzis & McKee, 2013), employee commitment (Brunetto, Teo & Farr‐Wharton, 2012; Farahani, Taghadosi & Behboudi, 2011), employee motivation (Serrat, 2017), customer loyalty (Delcourt, Gremler & Van Birgelen, 2013), and quality of service (Huang, Chan & Nan, 2010). Masa’deh (2016) study investigated the role of EI in organisational effectiveness whereby a study sample of 154 employees of Jordanian public shareholding organizations. The findings showed that a’ significant relationship existed between EI and organization effectiveness whereby age and experience had a significant influence on the relationship. In conclusion, the study emphasizes that the management of one’s emotions and feeling predicted organizational effectiveness, which is supported by other studies, as well (Fisk & Friesen, 2012; Liu, Prati & Brymer 2010; Cherniss (2010).
In extant literature on leadership, a myriad of scholars and research studies focus on the EI and its relatedness and influence on effective leadership (Hunt & Fitzgerald 2013; Sin & Yazdanifard, 2014; Corona, 2010; Liu, Prati & Brymer, 2010). Kim (2017) highlights that effective leaders have the capability to use their emotions and feelings to convey messages Spano-Szekely, Griffin and Fitzpatrick (2016) resonate with findings by identifying that when leaders are active, feel excited and show enthusiasm they are better equipped to energize their followers. Sin and Yazdanifard (2014) study entails a descriptive-analytic approach whereby secondary sources from peer-reviewed sources are analysed to investigate the relationship between emotional intelligence and transformational leadership and how the relationship impact organizationa culture. The findings reveal that a positive relationship exists between EI and transformational leadership, which is consistent with other studies (Fisk & Friesen, 2012; Huang, Chan & Nan, 2010; Delcourt, Gremler & Van Birgelen, 2013; Serrat, 2017). Furthermore, Sin and Yazdanifard (2014) highlights that EI promotes leadership effectiveness which in turn positively impact organizational culture. According to Spano-Szekely, Griffin and Fitzpatrick (2016) study a positive correlation exists between transformational leadership and EI. In essence, EI and transformational leadership promote Nurse managers’ outcomes that depict effectiveness, satisfaction and extra-effort. The research recommends that it’s critical for Nurse Managers to have EI characteristics and health organizations should incorporate this approach in recruitment as a way of enhancing organizational performance.
Danquah (2014) proposed that EI is directly related to performance and notably many studies on this concept both empirically and conceptually support this perspective (Danquah, 2015; Devonish & Greenidge, 2010; Komlósi, 2013; Druskat, Mount & Sala, 2013; Pahuja & Sahi, 2012). According to Druskat, Mount and Sala (2013) self-awareness capability is critical in regard to work performance and has been identified approximately eighty percent of people with high self-awareness are good performers compared to two percent of poor performers. In a similar light, Danquah (2014) identifies that EI has both a direct and indirect impact on organizational performance and business. The study expounds that a positive relationship exists between EI and customer satisfaction, which is positively linked to business performance. Furthermore, the findings also highlight that a positive relationship exists between EI and business performers. These findings are further supported by Rahim and Malik (2010) identifying that EI is a primary moderator of the relationship between service delivery and customer satisfaction. Rehman, Khalid and Khan (2012) further resonate with these findings by highlighting that EI is a moderator between customer satisfaction and organizational performance.
Emotional Intelligence and Transformational Leadership
One of the primary constructs linked to EI is leadership (Rahim & Malik, 2010). Countless theories have been proposed, which outline underlying characteristics of leadership, and major contemporary constructs gaining much traction are transformational and transactional leadership. According to Rehman, Khalid and Khan (2012) there is a consistent positive correlation between transformational leadership and EI, which is consistent with other studies, such Danquah (2015) highlight that leaders possessing high EI capabilities significantly contribute to organizational success, given that effective leaders ought to be able to assess employees feelings about work and work environment. Furthermore, Komlósi (2013) highlight that transformational leadership underpinnings require leaders to have self-awareness and capabilities of emotional self-management, which are primary attributes found in EI models, such as Goleman’s mixed model. Furthermore, Corona (2010) investigated the relationship that exists between the two variables of EI and transformational leadership, whereby a sample size of 103 employees in Hispanic American business organization was used. The study identified that a positive correlation was depicted between EI and transformational leadership.
Pillay, Viviers and Mayer (2013) study based on a self-report analysis also investigated the relationship between EI and transformational leadership. Notably, the study partly contrasts extant literature supporting a positive correlation by identifying that negative association exists between EI and laissez-faire form of leadership, with reference to intrapersonal skills. Alam (2014) research investigated the link between EI and transformational leadership, whereby a sample size of 101 sports managers was used. The findings revealed that multiple and simple positive correlations existed between the two variables of study. In particular, motivation was identified as the primary EI component used to predict transformational leadership within the sample. The findings further support the assertion that an increase in EI leads to an increase in transformational leadership as was the case with the sports managers, and also explained 41.7 percent of transformational leadership. Multiple correlations between EI constructs, self-regulation, social skill, motivation, empathy and self-awareness were identified, whereby the findings indicate a positive correlation between the five constructs and transformational leadership exists as evident from the study sample.
Many pieces of research on the relationship between EI and transformational leadership are reasonably founded on conceptual constructs and intuitive appeal, however different and various empirical findings have consistently highlighted the existence of mixed outcomes (Matthews, Zeidner & Roberts, 2012; Harms & Crede, 2010). According to Linebaum and Cartwright (2010), there exists a controversy of common method variances in researches using same data sources to investigate the relationship between the two variables. In a similar light, Cavazotte, Moreno and Hickman (2012) highlight that when analysed singularly, EI is statistically linked to transformational leadership, although in light of personality and ability the effect was found to be non-significant. Furthermore, Kim (2017) study encompassing a review study of 20 empirical studies, highlights a major contradiction and problem with the measurement of EI, and emphasizes the need for more reliable and valid assessments that can predict the relationship between EI and transformational leadership accurately. Given the aforementioned contradictions and lack of a comprehensive summation on the relationship between EI and transformational leadership, this research seeks to provide additional insights with aim of addressing eminent gaps.
Role of Transformational leadership in Organizational Performance
Transformational leadership plays a critical role in supporting organizations’ improvement in performance more so given the dynamic business environment Pahuja and Sahi (2012) contribute to the research on the impact of transformational leadership on organizational performance and highlights that organizational innovation and learning are major support underpinnings. In particular, the findings highlight that transformation leadership underpinnings support organizational learning and innovation, which simultaneously enhance organizational performance. Furthermore, Kim (2017) study encompassing comparative analysis of 117 samples obtained from 113 primary studies identified that transformational leadership was positively correlated to contextual performance and the correlation was stronger than in the case of task performance. However, transformational leadership depicted a positive relation to both team and organization performance levels, which is consistent with other studies (Cavazotte, Moreno & Hickmann, 2012; Lindebaum & Cartwright, 2010). Furthermore, Harms & Credé (2010) research findings of meta-analytic reviews also concur that, among support staff, a positive relationship is evident between the two variables.
The Interrelationship between emotional intelligence, transformational leadership and organizational performance
Conceptual Framework: Emotional Intelligence, Transformational Leadership and Organizational Performance
This paper is a conceptual research study that reviews and provides explanations on the interrelationship between EI, transformational leadership, and organizational performance. The findings show that a positive relationship exists between emotional intelligence and transformational leadership. In essence, improved emotional intelligence enhances transformational leadership. Furthermore, an improvement in emotional intelligence and transformational leadership positively impacts organizational performance. The findings have both practical and theoretical implications. The proposed conceptual framework enhances an organization’s capability to improve and change, and in turn, supports effective organization competitiveness and effectiveness. In addition, organizational leaders ought to evaluate leadership behaviours and characteristics when it comes to the implementation of EI and transformational leadership in organizations. In addition, the study identifies that transformational leaders with high EI are better placed to enhance achievement and organizational effectiveness. Extant literature used in this study focus on varying contexts and specific research samples, which limit the generalizability of study findings. Furthermore, few studies focus on the relationship between the three variables that is EI, transformational leadership and organizational performance. To this end, the findings of this study provide a more comprehensive analysis of the interrelationship between EI, transformational leadership and organizational performance.
© 2018 Jackline Rukungu