The Relationship Between Emotional Intelligence and Organizational Performance: An Exploratory Study in Bangladesh

Abstract

Many organizations have realized that to stand out in today's competitive business world, they need not only academic skills but also emotional intelligence (EI). This study aims to investigate the relationship between EI and the organizational performance of university teachers. The convenient sampling technique has been used to select 200 respondents from 25 universities, and a self-administered research instrument has been employed to collect data from the respondents. The reliability test of items is confirmed by Cronbach's Alpha test using SPSS. Factor analysis has been used to find out the significant constructs of EI, which influence organizational performance. Likert scale and multivariate regression analysis have been used for measuring questionnaire items and testing hypotheses. The key outcomes of this study suggest that interpersonal competence, job performance, effective leadership, motivation and creativity, and social competence have a vital influence on organizational performance. The study also reveals that a decision-making system should be developed and the policymakers and concerned authorities should give more emphasis on key variables of EI that are affecting the advancement of higher education. Further investigation is encouraged to identify the mediating and moderating effects of EI on the relationship between employee work engagement and job performance in the organization.

1. Introduction

 Emotional intelligence (EI) is considered a popular and highly examined research phenomenon in recent times (Ashkanasy, 2003; Bar-On et al., 2006), which has a great influence on individual and organizational performance. Its importance and relevance in various fields are being scientifically researched and asserted. Ambitious managers always give more emphasis on the high-level EI for ensuring success in the organization. Employees with higher EI are able to manage their time in a more efficient manner, maximizing their productivity. Besides, interpersonal competence, job performance, effective leadership, motivation and creativity, decision-making, and social competence are the outcomes of high-level EI (Utami et al., 2014). Emotionally Intelligent individuals are optimistic and are always naturally working towards a goal, whether personal, professional, or both. These individuals have a growth mindset and they persevere no matter the obstacles they face (Ciarrochi et al., 2006).

 This study aims to determine the phenomenon of EI among university teachers in higher educational institutions of Bangladesh. Universities in Bangladesh are mainly categorized into three different types: public, private, and international. Bangladeshi universities are affiliated with the University Grants Commission, a commission created according to the Presidential Order (P.O. No 10 of 1973) of the government of the People’s Republic of Bangladesh. Universities in Bangladesh represent about 170 academic bodies of the conventional Higher Education Institution (HEI) in Bangladesh. Segmented by management and financial structure, Bangladesh has 53 public universities, 107 private universities, two international universities, two special universities, and two private universities dedicated solely to female students. Researchers from different schools of thought have discovered the contribution of EI. EI explains possible outcomes, which can be mental and physical health, well-being, and social support. There is room for research in this particular area in the context of Bangladeshi public and private universities.

 In addition, the productivity and commitment of university faculties are vital for the ultimate success of such educational institutions (Khan & Qianli, 2017). Teachers with a high level of EI carefully communicate with others having constructive aims and goals and also control their emotions more carefully rather than reacting to the situation. To provide a high standard of education to students, it is important to identify the need for developing activities that improve the EI of teachers and equips them with the skills to deal with issues that require high EI.

 This paper deals with the EI competencies to explain how they affect interpersonal competence, job performance, decision-making, effective leadership, motivation and creativity, and social competence among university professionals. For achieving this purpose, this study is divided into several segments. The introduction is followed by the literature review. The methodological section leads into the presentation of data and analysis, and the paper closes with a discussion, limitations, and indications for further research and conclusion.

2. Literature Review

 The survival of organizations till now was relatively predictable. For the growth and sustainability of organizational performance, it is important that the organization focus on employees’ EI (Jorfi et al., 2014). There is a need to measure such EI to gauge an organization’s effectiveness. The efficient and effective use of one’s abilities is called performance. In terms of a teacher’s performance, both the intellectual and physical aspects of teaching are taken into consideration by researchers. The ability of employees to utilize their competencies to achieve the goals of the organization is called organizational performance (Campbell et al., 1998).

 In the case of teachers, work performance is studied in terms of teacher’s ability to reshape their behavior in accordance with the changing work environment and successfully complete the given task (Marsh, 1987; Medley, 1982). There are studies that show a positive relationship between employee performance and EI (McClelland, 1998; Sue-Chan & Latham, 2004; Law et al., 2004; Nguyen et al., 2020). Competency research by Moradi and Ardahaey (2012) of 200 companies and organizations worldwide showed that employees with high EI had a high organizational performance.

 Besides, understanding the emotions of employees in the working environment has been identified as a crucial factor for ensuring project success (Doan et al., 2020). Researchers have established that individuals who scored high in EI enjoyed better health and well-being, exhibit better management effectiveness, show less stress, and displayed better work performance (Spector & Goh, 2001; Slaski & Cartwright, 2002; Duran et al., 2004). The study also showed that emotion can predict satisfaction while satisfaction had an effect on performance in their workplace (Khan & Qianli, 2017). On the other hand, the research found an insignificant and negative effect of EI on the performance of the teachers (Ingsih et al., 2020). In these circumstances, it is crucial to examine the extent of the relationship between these two variables.

 Researchers developed several motivational theories from individual and organizational perspectives. Among those, the ability and mixed models are given maximum attention. The ability model, developed by Salovey and Mayer (1997), presented EI as the set of different abilities and suggested that people vary in their emotional understanding and perception. To measure individual abilities, Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT) is used, which provides a set of emotional problem solving tasks. Unlike the ability model, the mixed model combines skills, competencies, and capabilities (Goleman, 1995; Bar-On et al., 2006). Bar-On’s model consists of five interrelated competencies, skills, and behavior clusters that were identified from academic literature. Specifically, they were considered because they were all perceived to impact the well-being and performance of employees.

2.1. Interpersonal Competence

 Hogan and Warrenfelz (2003) defined interpersonal skills as the behaviors and tactics people use to interact with others effectively. Interpersonal competence is the ability to interact with others and with the community. This includes the ability to build and maintain healthy relationships (Hunt & Baruch, 2003). According to Goleman (1998), an individual’s success on the job relies 80% on EI and only 20% relies on intelligence quotient. This proves the value of interpersonal skills in each organization (Doya et al., 2007). A leadership style that encourages good workplace interpersonal relationships will give the employees the privilege of relating with one another, initiating good suggestions as to how the task will be carried out, increase teamwork, improved employee motivation which will ultimately impact the level of the organization’s productivity.

H1: There is a significant relationship between inter­ personal competence and organizational performance.

2.2. Job Performance

 An employee’s performance can be ascertained by using a scale known as job performance. Previous studies suggested that EI is a potential predictor for job performance. Yoke and Panatik (2015) observed the relationship between EI and job performance among a sample of 192 school teachers from the primary and secondary schools of Peninsular, Malaysia, and the results showed that EI significantly correlated with the job performance. Al Hamdan et al. (2017) conducted a study on the EI ability of the Jordanian nurses and the findings of the‐

study revealed a positive relationship between EI and job performance. Chipumuro (2015) found that a top performer is 85% to 127% more profitable than an average performer and that two-thirds of this variation can be accredited to EI. Jaeger and Thompson (2003) explored the effect of EI on academic performance among a sample of 150 students in the northern United States.

H2: There is a significant relationship between job performance and organizational performance.

2.3. Effective Leadership

Important leadership skills highly depend on the competencies to understand and control emotions at the workplace; hence, the ability accompanied with EI will influence the capability to lead people. Mandell and Pherwani (2003) found that the level of EI significantly relates to the transformational leadership style. Goleman (2001) pointed out that leaders high in emotional intelligence are key to organizational success, and leaders must have the capacity to sense employee’s feelings in their work environment, to intervene when problems arise, to manage their own emotions to gain the trust of employees and understand the political and social conventions within an organization. Salicru (2005) emphasized that managers with a balanced mix of IQ and emotional intelligence perform a superior leadership compared to those that do not have this.

H3: There is a significant relationship between effective leadership and organizational performance.

2.4. Motivation and Creativity

An emotionally intelligent person can inspire his stance for himself and others, which produces better results in personal and work life. So, employees whose motivation level is high are more prepared and dedicated to accomplish the organizational goals (Alavi et al., 2013). EI is a primary component from which motivation arises. People with a high level of EI have the ability to motivate one another. Lee and Olszewski-Kubilius (2006) defined creativity as the act of turning new and imaginative ideas into reality. Creativity is characterized by the ability to perceive the world in new ways, to find hidden patterns, to make connections between seemingly unrelated phenomena, and to generate solutions. Creativity is needed for better employee performance results, besides that creativity can also be used as a basis for innovation, and organizational competitive advantage. Employee creativity must be empowered, considering that if employees are given freedom or autonomy, they will maximize their skills which will then benefit the organization (Loo, 2019).

H4: There is a significant relationship between moti­ vation and creativity and organizational performance.

2.5. Decision-Making

Decision-making is perhaps the most important component of a manager’s activities. It plays the most important role in the planning process. Many researchers agree that the key to excellent decision-making is the aggregate of both thinking and feeling in one‘s decisions. Positive moods and emotions lead to better decision- making. The decision-making effects of any kind of bad mood can hinder a person’s job performance and lead to poor decisions that affect the company. In contrast, a positive mood can enhance creativity and problem- solving. George (2000) stated that emotions constitute potent, pervasive, predictable, sometimes harmful, and sometimes beneficial drivers of decision making. Research shows that EI enables us to make effective decisions. Emotionally intelligent managers make better decisions by using emotions to improve judgments and see things clearly even when feelings are overpowering. Leaders with emotional intelligence tend to achieve their personal and organizational goals more effectively than leaders without that quality (Goleman, 2001; Boyatzis et al., 2000).

H5: There is a significant relationship between decision making and organizational performance.

2.6. Social Competence

Social Intelligence (SI) is the ability to successfully build relationships and navigate social environments (Hughes et al., 2009). Singh (2006) studied social work professionals psychologically. The study was conducted on a sample of 178 participants. The findings depicted role efficacy to be associated positively with emotional intelligence and internal locus of control, but negatively with an external locus of control. Similarly, emotional intelligence was found to be associated positively with internality but negatively related to externality. The findings also indicated that emotional intelligence alone accounts for 43% of the variance in role efficacy of social work professionals. Hopkins and Bilimoria (2008) in their study explored the relationship between emotional and social intelligence and organizational performance.

H6: There is a significant relationship between social competence and organizational performance.

3. Research Objectives

The core rationale of the research is to examine the relationship between emotional intelligence and organizational performance. The specific rationales of the research are as follows:

To examine the relationship between factors of EI and organizational performance.

To empirically test the impact of EI dimensions on the performance of university teachers.

4. Research Methodology

4.1. Sampling and Data Collection Technique

A survey method was used to collect primary data from the respondents through a formed questionnaire and secondary sources were used for enhancing the insights of this paper, such as articles published in different journals, books, working papers, conference papers, and websites, etc. 200 universities teachers from 25 universities have been conveniently selected and included in the sample. A pilot survey was also directed on 30 respondents to test the reliability of the questionnaire and to eliminate obscurity.

4.2. Questionnaire and Measurement Drivers

The questionnaire consisted of twenty-five items to be responded on a five-point Likert scale and five questions related to general information such as gender, age, designation, educational qualification, and job experience. The questionnaire was prepared based on existing literature to measure the factors affecting organizational performance. Part A consists of demographic information and Part B consists of selected items. The questionnaires used the drop-off and pick-up (DOPU) method, and prior research claimed that the DOPU method is an effective means to reduce potential nonresponse bias through increased response rate (Maclennan et al., 2011; Qader & Zainuddin, 2011; Rubel et al., 2017). A total of twenty five drivers for the study on EI have been designed based on prior research (Hunt & Baruch, 2003; Goleman, 1998; Yoke & Panatik, 2015; Al Hamdan et al., 2017; Mandell & Pherwani, 2003; Alavi et al., 2013; George, 2000;‐

Goleman, 2001; Boyatzis et al., 2000; Hughes et al., 2009; Hopkins & Bilimoria, 2008). The survey was conducted from January 2020 to September 2020.

4.3. Model Specification

The following regression model was proposed based on the review of literature:

Y = β₀+ β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + β₅X₅ + β₆X₆ + ε

Where, Dependent Variable

Y = Organizational Performance Independent Variables

X₁ = Interpersonal Competence

X₂ = Job Performance

X₃ = Effective Leadership

X₄ = Motivation and Creativity

X₅ = Decision Making

X₆ = Social Competence

β₁, β₂, β₃, β₄, β₅ and β₆ = Coefficient to estimate

β₀ = Constant and

ε = Error Term

5. Results

5.1. Reliability Analysis

Table 1 shows the Cronbach’s Alpha for interpersonal competence (0.716), job performance (0.699), effective leadership (0.689), motivation and creativity (0.793), decision making (0.737), social competence (0.792), and overall organizational performance (0.714). It satisfies the criteria as the alpha values are greater than 0.650, which indicates potential correlations between the indicators and the associated factors.

Table 1: Reliability Test

5.2. Demographic Statistics

As shown in Table 2, males accounted for 60% whereas females accounted for 40%. 35% of the respondents were aged between 25–35, 38.5% were aged between 35–45, 16.5% were aged between 45–55, and the remaining 10% were aged above 55. Regarding educational qualification, 2.5% of respondents were bachelor degree holders, 50% were master degree holders, 20% were Mphil and the remaining 27.5% were Ph.D. holders. Regarding their jobs, 35% were lecturers, 27.5% were assistant professors, 22.5% were associate professors, and 15% were professors. Furthermore, 40% of respondents were having job experience from 0–5 years, 45% between 5–15 years, and the remaining 15% were above 15 years.

Table 2: Demographic Characteristics of Respondents (n = 200)

5.3. Factor Analysis

The study applied exploratory factor analysis to identify the structure of the latent variables. For conducting factor analysis, principal component analysis (PCA) was deployed for finding the maximum variance extracted from the variables with varimax rotation procedures (Table 3). This criteria factor having eigenvalues higher than 1.0 is considered significant. Kaiser-Meyer-Olkin (KMO) measurement was used and the value of KMO is 0.50 or above indicates that data seems suitable for factor analysis suggested by Hair et al. (2003).

Table 3: Summary of Rotated Component Matrix, Cronbach’s Alpha, Kaiser-Meyer-Olkin (KMO), Variance and Eigenvalues

Dimension 1: The extracted first factor is interpersonal competence that shows an eigenvalue of 2.185 and the KMO value is 0.645. This factor is represented by four variables (IC1, IC2, IC3, IC4) accounting for 54.615% of the variance. The factor loadings of the variables range from 0.156 to 0.901 with four items relating to interpersonal sensitivity, emotional resilience, intuition, and conscientiousness.

Dimension 2: The second factor is job performance that shows an eigenvalue of 2.123 and KMO is 0.641. This factor is represented by four variables (JP1, JP2, JP3, JP4) accounting for 53.072% of the variance. The factor loadings of the variables range from 0.166 to 0.890 with four items relating to reading people, using emotions, understanding emotions, managing emotions.

Dimension 3: The third factor is effective leadership that shows an eigenvalue of 2.094 and the KMO value is 0.644. This factor is represented by four variables (EL1, EL2, EL3, EL4) accounting for 52.352% of the variance. The factor loadings of the variables range from 0.170 to 0.883 with four items relating to self-awareness, controlling emotions, motivating oneself, and empathy.

Dimension 4: The fourth factor is motivation and creativity that shows an eigenvalue of 2.125 and the KMO value is 0.702. This factor is represented by three variables (MC1, MC2, MC3) accounting for 70.841% of the variance. The factor loadings of the variables range from 0.817 to 0.863 with three items relating to optimistic, creative, and better personality.

Dimension 5: The fifth factor is decision-making that shows an eigenvalue of 1.982 and the KMO value is 0.619. This factor is represented by three variables (DM1, DM2, DM3) accounting for 66.067% of the variance. The factor loadings of the variables range from 0.772 to 0.886 with three items relating to effective decision-making, problem-solving, and negotiation.

Dimension 6: The sixth factor is social competence that shows an eigenvalue of 2.122 and the KMO value is 0.702. This factor is represented by three variables (SC1, SC2, SC3) accounting for 70.727% of the variance. The factor loadings of the variables range from 0.818 to 0.862 with three items relating to social awareness, social responsibility, and social relationship.

Dimension 7: The seventh factor is organizational performance that shows an eigenvalue of 2.179 and the KMO value is 0.652. This factor is represented by four variables (OP1, OP2, OP3, OP4) accounting for 54.481% of the variance. The factor loadings of the variables range from 0.160 to 0.897 with four items relating to emotional management, relationship management, adaptability, and stress management.

5.4. Correlation Analysis

A correlation matrix of all values of (r) for the independent variables along with the dependent variable is shown in Table 4. The result of Pearson correlation coefficient (r) shows that organizational performance is strongly correlated with interpersonal competence (r = 0.996, p = 0.01), job performance (r = 0.984, p = 0.01), effective leadership (r = 0.987, p = 0.01), motivation and creativity (r = 0.879, p = 0.01), decision making (r = 0.924, p = 0.01) and social competence (r = 0.884, p = 0.01), which indicates all factors have a great influence on organizational performance.

Table 4: Correlation Test

**Correlation is significant at the 0.01 level (2-tailed).

5.5. Regression Analysis

In Table 5, the interpersonal competence variable has (β = 0.658, p = 0.000), which means one unit change in interpersonal competence brought 0.658 unit change in organizational performance (while keeping other variables constant). The job performance variable has (β = 0.147, p = 0.000), which means one unit change in job performance brought 0.147 unit change in organizational performance (while keeping other variables constant). The effective leadership variable has (β = 0.191, p = 0.000), which means one unit of change in effective leadership brought 0.191 unit change in organizational performance (while keeping other variables constant). The motivation and creativity variables have (combined) (β = −0.233, p = 0.000), which means one unit of change in motivation and creativity brought −0.233 unit change in organizational performance (while keeping other variables constant). The decision-making variable has (β = −0.003, p = 0.828), which means one unit of change in decision-making brought −0.003 unit change in organizational performance (while keeping other variables constant). The social competence variable has (β = 0.252, p = 0.000), which means one unit change in social competence brought 0.252 unit change in organizational performance (while keeping other variables constant).

Table 5: Regression Analysis

^aDependent Variable: Organizational Performance (OP).

The decision on the hypotheses is summarized in Table 6.

Table 6: The Decision on the Hypotheses

Significance level at 5%.

6. Discussion

Based on the analysis, the result shows that the most important factor of EI is interpersonal competence that affects organizational performance. The finding is consistent with previous research (Hunt & Baruch, 2003; Hogan & Warrenfelz 2003). Job performance is shown as the second important factor of organizational performance and it necessitates the importance of giving employees the right feedback, rewards, and performance progress plan that may encourage better productivity (Tanchi, 2015; Azad et al., 2011). The result exhibits that decision-making activities do not impact organizational performance and the remaining five elements of EI such as interpersonal competence, job performance, effective leadership, motivation and creativity, and social competence have significant positive impacts on organizational performance. So, the linear relation can be interpreted as

Y = β₀+ β₁X₁ + β₂X₂ + β₃X₃ + β₄X₄ + β₅X₅ + β₆X₆ + ε

Organizational performance

(Y) = β₀ + (0.658) × X₁ + (0.147) × X₂ + (0.191) × X₃ + (−0.233) × X₄ + (−0.003) × X₅ + (0.252) × X₆+ ε

and the equation states that organizational performance is the function of interpersonal competence, job performance, effective leadership, motivation and creativity, decision making, and social competence.

The main objective of this research is to examine the relationship between EI and organizational performance in the context of faculty members of the universities in Bangladesh. In this study, six important factors of EI that influence organizational performance were identified through an extensive literature review. These factors have been validated through statistical procedures to ensure the reliability and acceptability of this study. Interpersonal competencies have a significant relationship with organizational performance (Hogan & Warrenfelz, 2003; Goleman, 1998; Doya et al., 2007). In our findings, the results of correlation analysis show that interpersonal competence is strongly correlated with organizational performance (r = 0.996, p = 0.01), and the regression analysis shows (β = 0.658, p = 0.000) with a significance of (0.000), which shows the model’s fit. EI is significantly correlated with job performance and there is a possible connection between job performance and organizational performance in the workplace. Job performance refers to the level to which an employee successfully fulfills the factors included in the job description. Employee job performance is identified as one of the most important components in measuring a company’s efficiency implying that employee high performance reduces organizational production cost. This is mostly observed in organizations where employees are satisfied with their jobs (Yoke & Panatik, 2015; Petrides et al., 2010; Abdullah et al., 2004; Rozell et al., 2004).

In our study, the correlation analysis shows that job performance is strongly correlated with organizational performance (r = 0.984, p = 0.01), and the regression analysis shows (β = 0.147, p = 0.000) with a significance of (0.000), which shows the model’s fit. Leaders high in emotional intelligence are key to organizational success, (Mandell & Pherwani, 2003; Goleman, 2001; Salicru, 2005). The results of our correlation analysis show that effective leadership is strongly correlated with organizational performance (r = 0.987, p = 0.01), and the regression analysis shows (β = 0.191, p = 0.000) with a significance of (0.000), which shows the model’s fit. The results of correlation analysis show that motivation and creativity are strongly correlated with organizational performance (r = 0.879, p = 0.01), and the regression analysis shows (β = −0.233, p = 0.000) with a significance of (0.000), which shows the model’s fit. Whether it be connecting with others and improving interpersonal communication, achieving success in the workplace or social relationships, dealing with stress, and improving motivation or refining decision-making skills – emotional intelligence plays a central role in realizing success in both personal and professional life. Our emotions perform a much greater role in thought, decision-making, and individual success (George, 2000; Goleman, 2001; Boyatzis et al., 2000; Leban & Zulauf, 2004). In our findings, correlation analysis shows that decision-making is strongly correlated with organizational performance (r = 0.924, p = 0.01) and the regression analysis shows (β = −0.003, p = 0.828) with a significance of (0.828), which shows that model is not fit for decision-making. This study indicates that there is a need for improvement in decision-making. In our result, the correlation analysis shows that social intelligence is strongly correlated with organizational performance (r = 0.884, p = 0.01), and the regression analysis shows (β = 0.252, p = 0.000) with a significance of (0.000), which shows the model’s fit. Social skills are also highly valued in the workplace because they lead to better communication and a more positive company culture. Successful employees with high emotional and social competencies have the ability to maintain a high degree of relationship between social intelligence and organizational performance (Singh, 2006; Hughes et al., 2009; Hopkins & Bilimoria, 2008).

This research study is very helpful for top management in making decisions concerning factors that reduce the performance of employees (faculty members) working in higher educational institutions. Better job performance can be accomplished by identifying the factors which can create problems in the normal working schedule of employees. Satisfied and motivated employees will contribute to enhanced organizational productivity, which leads to overall company success. Motivated employees serve with a greater sense of responsibility towards company goals and bring a more innovative, lower stress approach to work Workplaces that allow their employees the opportunity to be creative and innovative are high in EI. Giving people the chance to practice their creativity and think outside the box is not only a welcome gesture for employees, it is also a smart move for the workplace. Employees must be able to predict how to respond to different situations, changes, and events, and effectively handle these reactions. If a workplace is generally high in emotional intelligence, it is likely that employees handle change well. Change initiatives are taken seriously and carried out in earnest.

Limitations of the study should be addressed. First, the study was conducted in 25 private and public universities of Bangladesh taking only a sample size of 200, hence the study results cannot be generalized. Second, the research only considered six factors with 21 items though there are many other factors that influence organizational performance. Third, the relationship between organizational performance and interpersonal competence, job performance, motivation and creativity, effective leadership, and social competence is quite clear, but decision-making should be studied further. Future research can be conducted to see the mediating and moderating effects of EI on the relationship between employee work engagement and job performance in the organization.

7. Conclusion

EI performs a meaningful role for employees in the organization. This study assures that EI generates organizational success through effective performance. EI is important as it gives the ability to understand and manage emotions effectively. Applying EI in the workplace gives the ability to create better relationships with your clients and coworkers and promote a positive work environment for the whole team. An emotionally intelligent organization can be formed through interpersonal competence, job performance, effective leadership, motivation and creativity, decision- making, and social competence tools. Essentially, EI in the workplace comes down to understanding, expressing and managing, good relationships, and solving problems under pressure. EI is widely recognized as a valuable skill that helps improve communication, management, problem- solving, and relationships within the workplace. It is also a skill that researchers believe can be improved with training and practice.

Researchers indicate that EI influences employees’ performance and success, as well as, overall organizational performance. Therefore, it is recommended that organizations should increase training programs to enhance the emotional competencies of managers and workers in the organization. Organizations should acknowledge the significant contribution of EI in enhancing human capital that leads to a high-performing workforce. Successful integration of these competencies at work can lead to greater organizational achievement, success, prosperity, productivity, employees’ betterment, well-being, and a healthy work environment.