Impact of Emotional Intelligence on Organisational Performance: An Analysis in the Malaysian Public Administration

Abstract

Organisations have shifted from traditional beliefs to the incorporation of agile methods for attaining high levels of performance through its established goals and objectives. Emotional intelligence (EI) is envisaged to contribute to the achievement of higher levels of performance. With the current global economic crisis and the pandemic situation, it has become very critical to achieve higher levels of performance with limited resources. Countries confront challenges by way of attaining a higher level of emotional maturity and realisation in order to sail through the current economic storm. The Administrative and Diplomatic Officers (ADOs) are seen to shoulder a heavy responsibility in materialising this shift. This study analyses the impact of EI on organisational performance (OP) in the Malaysian public sector. A survey instrumentation was distributed to 700 ADOs based in Putrajaya, within five selected ministries, obtaining 375 valid responses. The results attained, analysed using the SMART-PLS method, affirm the significant positive effect of EI on OP, suggesting the need for an increase in the EI of civil servants by including EI indicators and measures in the areas of recruitment, learning and development, workforce planning, succession planning, and organisational development. EI should actively be adopted to increase awareness and maturity, which would thus enable civil servants to embrace the current challenging agile environment.

Impact of Managers’ Emotional Competencies on Organizational Performance

“…Since each construct's square root of AVE was higher than its correlation with another construct, discriminant validity was reached. Table 5 shows that all of the obtained values differ from each other to a satisfactory extent and describe the different phenomena [6]; since the value is below 0.9, we can conclude that the criterion of discriminant validity through HTMT is met.…”

“…In addition, it has been proven that low EI levels can lead to higher turnover rates of managers in companies in developing countries [53,54]. A similar study was conducted in Greece, the results of which also indicate a negative correlation between EI levels and turnover intention [6]. Given the fact that, recently, the number of employees actively looking for a new job is increasing and makes up 51% of workers [55], this result is the crucial one that could reduce this enormous turnover of employees, which would be beneficial both for employees and the company itself, by reducing the cost of finding new labor.…”

“…An imperative of effective leadership is the application of the concept of emotional intelligence [22], because 90% of successful leadership in a company is attributed to possession of emotional intelligence competencies [23] (p. 33). Such leaders identify with the organization, are more committed to it, and perform organizational tasks better, which can all contribute to a higher level of motivation in performance [6]. Through self-control of their own emotions and managing the emotions of others, they make the right business decisions [10].…”

“…Among the first research on the correlation between the EI of leaders and organizational performance was an empirical analysis by Kelley and Caplan [40], who observed that EI influences variations in performance levels. In addition, during the COVID-19 pandemic, the analysis of this topic was renewed in developing countries, where research highlighted the positive direct impact of managers' emotional intelligence on organizational performance [6,41]. In previous research, various EI competencies have been singled out, which contribute to a higher level of organizational performance.…”

“…The emotional intelligence concept helps companies to effectively implement a chosen business strategy while establishing a business culture of openness and trust that promotes internal and external networking to share knowledge and ensure a constant supply of innovation [1]. For this reason, over a long period of time, a large number of studies have focused on an analysis of the correlation between emotional intelligence and organizational performance in different business environments, most often in Western countries [2][3][4][5][6]. The statement of the authors Gondal and Husain that developing countries also have research potential to analyze this topic in more detail [7] has motivated the authors to conduct this research for the first time in the business environment of the Republic of Serbia.…”