Impact of Emotional Intelligence on Interpersonal Relationships and Organizational Effectiveness

This report provides a detailed outline of emotional intelligence and its impact on interpersonal relationships and organizational effectiveness. It also highlights the process of development and measurement of EQ and its appropriateness in recruitment and promotion.

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Executive summary
Emotional intelligence, commonly known as EI or EQ (emotional quotient) is an important
factor in the modern business world. According to the professional, higher EQ is mostly
preferred by the organizations than higher IQ. This refers to ability of the individuals to
understand their own and others emotions and management ability to channelize them
accordingly to achieve higher and better performance. This report provides a detailed outline of
emotional intelligence and its impact on interpersonal relationships and organizational
effectiveness. It also highlights the process of development and measurement of EQ and its
appropriateness in recruitment and promotion. The aim of the report is to provide information
regarding emotional intelligence to the management team of Data Solutions and ways to improve
their performance.

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Table of Contents
Introduction......................................................................................................................................3
Impact of emotional intelligence on interpersonal relationships at workplace...............................4
Impact of emotional intelligence on organisational effectiveness...................................................5
Development and measurement of emotional intelligence..............................................................5
Appropriateness of measuring emotional intelligence for the purposes of recruitment and
promotion.........................................................................................................................................7
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
Emotional Intelligence (EQ) refers to the ability of the individuals to recognize and
manage their own emotions as well as emotions of others. This term was coined by Michael
Beldoch in his 1964 paper and Daniel Goleman made it popular in his 1995 book of the same
name. Management of emotional intelligence includes the activities of discerning between
different types of emotions or feelings and labeling those appropriately, applying the emotion
related information to direct the behavior and managing and./or adjusting the emotions for
adapting to the circumstances to achieve the individuals as well as organisational goals
(Goleman, Boyatzis and McKee 2013). As stated by Zeidner, Matthews and Roberts (2012),
emotional intelligence of an individual includes three types of skills, namely, emotional
awareness; the capacity to harness the emotions and applying those in thinking and problem
solving in the organization; and the capability of managing emotions of his own and of others.
Emotional intelligence is thus based on various characteristics of the individuals, such as,
empathy, leadership skills, motivation skills, trust and confidence as well as overall intelligence
level. This report is aimed to provide an outline of emotional intelligence and its various aspects,
such as, its effectiveness on interpersonal relationships at the workplace and on the
organizational effectiveness, methods of its development and measurement. It will also provide
recommendations on the appropriateness of measuring emotional intelligence for the purposes of
recruitment and promotion in an organization like Data Solutions, working with big data
analytics. Thus, through this report, the implications of emotional intelligence on improving the
organizational performance will be highlighted.

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Impact of emotional intelligence on interpersonal relationships at workplace
Interpersonal relationship refers to the association among the people working together in
the same organization (Ko and Kim 2014). This relationship is essential for establishing a
healthy and positive working ambience in an organization. Since, no individual can work alone,
and can take all decisions alone, hence, he needs to work in a team, in which there is positive
working culture with less amount of misunderstandings. At the same time, motivations, support
and coordination are also needed to perform better. Thus, strong interpersonal relationship is a
determining factor of the organizational performance and emotional intelligence plays a
significant role in influencing the interpersonal relationships in an organization (Khalili 2012).
According to Goleman, the fundamentals of emotional intelligence are, self-awareness, self-
regulation, motivation, empathy, social skills or interpersonal skills (Schutte and Loi 2014). High
level of emotional intelligence enables an individual to have a better cooperation with other
employees in the same organization, manage the work stress in a more balanced way, solve the
workplace and work related conflicts in a better manner, and rectify the previous mistakes (Wan,
Downey and Stough 2014). As the emotional intelligence includes aspects like understanding
and managing the emotions of one’s own and others in the workplace, it helps in identifying and
solving problems through communication among the team members and also guides them to
manage the stress effectively and take appropriate decisions.
According to a study by Dumbravă (2011), emotional intelligence improves business
communication as a specific form of social interaction or interpersonal relationships. This study
showed that non-cognitive aspects of EQ improves the capacity to understand, react and adapt to
the working conditions and ambience and thereby contributes positively in career
accomplishments. In a firm operating in big data analytics require people with high level of

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technical and analytical knowledge and skills, and they have to work in teams. Thus, a strong EQ
will help in developing strong interpersonal relationships among the team members and thereby
ensures a supportive work environment which improves productivity.
Impact of emotional intelligence on organisational effectiveness
According to Farh, Seo and Tesluk (2012), organizational effectiveness refers to the
concept of how effectively an organization is producing the output that it expected to produce.
EQ influences the organizational effectiveness in the following areas, such as, employee
recruitment and retention, talent development, teamwork, innovation, productivity, efficiency,
employee commitment, sales, revenues and profits, service quality, and customer loyalty.
According to this study, high EQ enables the top management to make good hiring decisions and
they can influence the team members to explore their potential to improve the performance. EQ
coupled with IQ helps the employees to adapt to the changes faster, develop their skills, drive
them for innovation, increases motivation and quality of performance, which in turn have a
significant impact on the job satisfaction, production and organizational effectiveness. EQ also
affects the mental and physical health of the employees. As per the study of Goleman, EQ
emerges primarily through the relationships and it also affects the quality of the relationships
(Meisler 2013).
Development and measurement of emotional intelligence
The development of emotional intelligence depends on many components, such as, self-
perception, self-expression or body language, interpersonal skills, decision making ability and
stress management capacity (Thakrar 2018). To develop EQ, these components must be
developed and controlled in the most effective manner. According to the author, one must

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identify his emotions and understand them well, and then he must learn how to manage those
emotions, especially the negative emotions and then develop empathy as per the requirement and
ability. It is necessary to have the capability to be assertive about any situation and express the
difficult and honest emotions whenever necessary. At the same time, EQ is developed when the
individual stays pro-active and not reactive in front of a difficult person in the organization.
Lastly, Sadri (2012) describes that one of the major factors of developing EQ is the capability of
an individual of bouncing back from the adverse situations. In such situations, an individual can
not only assess his EQ level but also gets to understand how to develop his EQ in a better
manner.
In regards to the measurement of emotional intelligence, there are many measures that are
used for measuring EQ. Some of the tests are BarOn Emotional Quotient Inventory, Emotional &
Social Competence Inventory, Emotional & Social Competence Inventory – U.S., Genos
Emotional Intelligence Inventory, Group Emotional Competency Inventory, Mayer-Salovey-
Caruso EI Test (MSCEIT), Schutte Self Report EI Test, Trait Emotional Intelligence
Questionnaire (TEIQue), Work Group Emotional Intelligence Profile, and Wong's Emotional
Intelligence Scale (Zeidner, Matthews and Roberts 2012).
Among these scales, Maul (2012) found in his study that performance based measures are
most suitable for measuring EQ. In this study, the suitability and validity of the Mayer-Salovey-
Caruso Emotional Intelligence Test (MSCEIT) was examined to measure the EU. In this test
scale, four branches of emotional intelligence are considered, and those are:
 Perceiving emotions: The capacity to perceive the emotions of oneself and others along
with in the objects like stories, music, arts etc.

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 Facilitating thoughts: Capacity of an individual for generating, using and feeling the
emotions as necessary aspects for communicating the feelings or employing them in the
cognitive processes
 Understanding the emotions: This represents the ability of the individuals for
understanding emotional information, and the ways that those are combined, their
progress through transitions of the relationships and appreciating the meanings of those
emotions
 Managing emotions: This refers to the ability of the individuals to be open about their
feelings and modulate those in oneself and in others to promote the personal
understanding and growth.
This test consists of 141 factors and takes around 30-45 minutes for completion. 15 main scores
are computed on the areas, namely, Total EI or EQ score, 2 Area scores, 4 Branch scores and 8
Task scores. There are also 3 supplemental scores. This test is mainly ability or performance
based (Mayer, Salovey and Caruso 2012). To measure the EQ in Data Solutions, the MSCEIT
can be applied. Under 141 items, it will cover all the emotional and performance based aspects of
the employees. The scores and performances of the employees will determine the EQ level and
its impact on their performances and subsequently on the organizational effectiveness.
Appropriateness of measuring emotional intelligence for the purposes of recruitment and
promotion
Emotional intelligence plays a major role in how the organizations view their executives,
managers and employees. Measuring EQ is necessary as that helps the organizations to identify
and understand the relationship level and guides them to figure out the ways to improve EQ and

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employee performance. According to Goleman, Boyatzis and McKee (2013), EQ is an ability to
combine the emotions, intelligence, and empathy to enhance the thought process and personal
dynamics, which is an influencing factors in problem solving and decision making. Recruitment
of right employees for the right position is extremely essential for improving organizational
effectiveness and the EQ enables the employers to take the right decision regarding the most
suitable employee for their organization. As per the survey by Horton International
(hortoninternational.com 2017), it has been found that 71% of the recruitment managers reported
that EQ is more important than IQ. 59% of the hiring managers reported that they do not prefer
to recruit people with higher IQ and lower EQ. Thus, higher EQ is an essential criterion for
getting employment. Intangible qualities are highly important along with the education and
technical skills of the professionals in the competitive market. During recruitment, the employers
check the ability of the candidate to handle any stressful situation and his decision making ability
while considering the interests of the stakeholders. The recruitment managers are now focusing
on the EQ through a variety of behavior pattern and qualities rather than the educational
qualification of the person. These EQ aspects help an employee to understand the gravity of the
business situation and environment and act accordingly to get the maximum productivity.
Similarly, Serrat (2017) states that promotion in an organisation mostly depends on the
performance of the employees during the evaluation period. In a data analytics firm, the ability to
handle client pressure and to establish coordination among the team is considered as an
impressive ability of the employees. In this context, the emotional intelligence of the employees
plays a significant role. It helps in establishing strong interpersonal relationships in the
organization and thereby improves work culture. This has a positive impact on the individual
performance of the employees. The behavioral aspects are often guided by the ability to

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comprehend and apply the emotions in the productive manner. This helps in improving the
emotional intelligence of the employees and also influences the personal and organizational
performance. Thus, it is important to measure emotional intelligence for the purpose of
promotion.
Data Solutions can implement the measures to evaluate the emotional intelligence of the
employees during recruitment and promotions to tap their potential capabilities for
accomplishing their personal and organizational goals. By applying the measures, such as,
MSCEIT, it can gather information on the capabilities of the employees regarding understanding
their own emotions, that is, self-awareness, self-regulation, motivation, empathy and social
skills.
Conclusion
From the above report it can be concluded that emotional intelligence is a very important
aspect of the employees the any organisation should consider while recruiting and promoting the
employees. As stated by Mayer and Salovey, EQ is defined as the process of recognizing, using,
and understanding and managing one’s own and others emotion based problems and regulating
their behavior accordingly. From the previous studies, it has been found that lack of emotional
intelligence often results in poor performance and poor interpersonal relationships at workplace
while employees with high emotional intelligence have performed well. Data Solutions is a firm
that deals with employees with higher IQ. However, by applying the techniques for measuring
the EQ of the employees, it can have an idea of how to improve their performance through their
emotional development and by ensuring the supportive work environment, it can implement a
foundation for strong interpersonal relationships. Ability to interact, understanding the emotions

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and needs of others will enable the employees to adapt to the dynamic situations in a more
effective manner. This would generate a more productive and high quality output. Thus,
emotional intelligence is a necessary factor that should be considered by Data Solutions during
the recruitment and promotion as that would guide the organization to understand the individual
dynamics and ways to improve those.

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References
Dumbravă, G., 2011. Workplace relations and emotional intelligence. Annals of the University of
Petroşani. Economics, 11(3), pp.85-92.
Farh, C.I., Seo, M.G. and Tesluk, P.E., 2012. Emotional intelligence, teamwork effectiveness,
and job performance: The moderating role of job context. Journal of Applied Psychology, 97(4),
p.890.
Goleman, D., Boyatzis, R.E. and McKee, A., 2013. Primal leadership: Unleashing the power of
emotional intelligence. Harvard Business Press.
hortoninternational.com, 2017. Emotional Intelligence and Its Importance for Hiring &
Promotion Decisions. [online] Horton International. Available at:
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Maul, A., 2012. The validity of the Mayer–Salovey–Caruso Emotional Intelligence Test
(MSCEIT) as a measure of emotional intelligence. Emotion Review, 4(4), pp.394-402.

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