How
Employee Emotions Affect Your Organization’s Ability to Compete
By David Lee
Reprinted from HR Today
Until recently, emotions were considered a
forbidden topic in the workplace. They were nobody’s business, and they had no
place in business. They were not to be discussed; they were to be left at home.
Today, research on how emotions affect
creativity, productivity, and career success has put a new spin on the subject.
Books such as Emotional Intelligence and Executive EQ are heightening Corporate
America’s awareness that employee emotions aren’t something that can be - or
should be - left at home.
Instead, management is waking up to the
fact that their success is directly related to their ability to work productively
with employee emotions. They are realizing that how well they elicit and
sustain positive emotional states in their employees plays a major role in
their organization’s success or failure. This is because emotions directly
influence the five major sources of competitive advantage in today’s
marketplace:
Intellectual Capital - In today’s knowledge-based economy, an
organization’s success is profoundly influenced by the knowledge, expertise,
and innovative capacity of its workforce.
Customer Service - With 70% of the economy being
service-related, providing excellent service is central to most businesses’
success. Furthermore, emerging research on customer loyalty shows that an organization’s
success is closely linked to its ability to create the kind of exceptional
customer service experience that leads to repeat business.
Organizational
Responsiveness - In
today’s ever-changing marketplace, organizations must respond rapidly, nimbly,
and flexibly to changing market conditions, business models, technologies, and
customer demands.
Productivity - Although productivity has always been
an issue, in today’s "do more with less" workplace, it is more
important than ever.
Employee Attraction
and Retention - In
today’s tight labor market and ultra-competitive marketplace, an organization’s
success depends more so than ever on its ability to attract and retain high
quality employees.
By becoming more knowledgeable about how
emotions affect the primary sources of competitive advantage, HR managers can
help their management team recognize the critical connection between employee
emotions and the bottom line. By doing this, they can help their management
team recognize that addressing employee emotions is not a "warm,
fuzzy" thing to do, but a smart business strategy that directly affects
the bottom line. The information in this article on how emotions affect the
primary sources of competitive advantage can be used by HR Managers to begin
this conversation.
Intellectual Capital
In today’s knowledge-based, innovation driven economy, the smart will survive.
Thus, one of management’s most important tasks is to cultivate and engage the
intellectual capital of its workforce. The general emotional state of a
workforce plays a major role in both the "amount" and "liquidity"
of an organization’s intellectual capital. Emotions directly affect the
"amount" of intellectual capital - how smart and innovative the
workforce is - because emotions directly affect intellectual functioning.
Research shows that when people are in a
negative emotional state, their thinking becomes less flexible, original, and
discerning. To put it bluntly, we are "dumbed
down" by negative emotions. Also, at the simplest level, when a workforce
is dispirited, they don’t have the interest or the energy to create, to
innovate, or to recognize new opportunities.
Conversely, when people are feeling
confident, secure, and passionate about their work, they are more likely to
envision new possibilities, generate creative solutions, and make wise
decisions.
Competing in a knowledge-based and
innovation-driven economy requires the sharing of information, knowledge, and
expertise throughout the entire organization. The greater the
"liquidity" of Intellectual Capital - the more freely it is disseminated
and used - the more successful the organization.
Emotions affect this liquidity. Whether or
not an individual’s Intellectual Capital is liquid - i.e. available for use by
others - depends upon how safe, valued, and committed they feel. If people feel
insecure, they are unlikely to share their knowledge and expertise, for fear of
losing their power base.
If they don’t feel valued or committed,
they will withhold their knowledge and insights as a form of
"payback." Either way, the organization loses out when intellectual
capital is kept out of circulation.
Thus, emotions affect people’s
intellectual functioning and their willingness to share their knowledge and
expertise with others - two essential components of maximizing Intellectual
Capital.
Customer Service
The connection between emotional state and customer service is obvious. If
service workers are angry, demoralized, or just plain disinterested, no amount
of training will offset the service climate their emotional state creates. The
economic consequence of not addressing front line employee emotions is
disastrous. Customer service research shows that 68% of customers defect from a
company because they were treated with an attitude of indifference. Thus, 68%
of what leads to customer defection is related to emotion - or in this case,
the lack of emotion.
Research by Bain and Company, a
Organizational
Responsiveness
In today’s high velocity, constantly changing marketplace, organizations need
to be extremely responsive. Being responsive means being both
fast and flexible. Emotions affect how fast and flexible people are in
their responses, and therefore how fast and flexible organizations are in their’s. If people are feeling threatened, stressed out, or just plain dispirited, they will resist change. They
will cling to outdated behaviors and methods, even when such behaviors and
methods are clearly not working.
Employees who feel
secure, committed, and passionate, find organizational and marketplace changes
energizing. They see
these changes as something that adds "spice to life," not something
to be feared and resisted. Thus, an organization’s ability to respond nimbly in
the marketplace is directly related to employee emotions.
Productivity
Emotion is sometimes defined as "energy in motion." When people feel
happy and excited, they have far more energy at their disposal than people who
are depressed or disinterested. Thus, a spirited workforce has more
"fuel" to power their production. On a practical level, the happier
an employee is with their work and their company, the more likely they will
work hard.
Employee Attraction
and Retention
Employee emotions clearly influence an organization’s ability to attract and
retain employees. The happier employees are, the more likely they will want to
stay. If an organization has a reputation for being a fun place to work, a
place where employees are treated well, and an organization that inspires pride
and passion; people will want to work there. Thus, such organizations not only
reduce costly turnover, they also benefit from their ability to attract the
"best of the best."
Conclusion
By helping management create an environment that
elicits and sustains positive emotional states in employees, HR Managers can
directly contribute to their organization’s bottom line. The first step in this
process is to help managers see how employee emotions directly affect the
primary sources of competitive advantage.
Only after this connection is made, will
management be willing to do the work necessary to create an organizational
environment that elicits and sustains positive emotional states in its
employees.
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About the Author: David Lee is a
consultant, speaker, and executive coach. The founder of HumanNature@Work, he has worked with organizations and
presented at conferences throughout
For More Information:
David Lee, President
HumanNature@Work
P.O. Box 430
Bar Mills, Maine 04004
Tel: 207-929-3344
E-mail: info@HumanNatureAtWork.com