How emotional intelligence impacts salary
The moment is tense. And in comes a manager with a grievance – with justification: you’ve just cut his project budget in half. “Take a seat,” you offer and the seconds of silence as he sits speak of imminent thunderclouds ahead. That is, until you calmly say: “Mike – I feel you have a rich sense of understanding about this issue. How do you think we can dispel those fears of not reaching the deadline?”
Mike looks surprised and then nods: “How did you know I’m not here about the money, but the result?”
You look down, nod in return, look up again and smile. “Mike – I know how it feels. I was once in your shoes…” Simultaneously, the words “maybe I feel I have a rich sense of understanding too” seem to fill the air above your head.
While the opening example to this article is perhaps a caricature, our research shows that if you demonstrate a rich degree of emotional intelligence (EI) at work, your salary package will likely increase.
The who, what, where, and why
Emotional intelligence has been described as a set of skills that can be used to accurately appraise the expression of emotions, manage emotions in oneself and others, and use feeling to motivate, plan and achieve. Even before its wider public visibility via the publication of David Goleman’s book Emotional Intelligence: Why It Can Matter More Than IQ in 1995, there had been much research on EI and its supposed link to measures ranging from leadership achievement, to life success, and effective team management. And yet, most of the research before and since has either missed out on the relationship between EI and career success or else focused on short-term work outcomes such as job performance and job satisfaction.
As a rule, the findings from this pool of research have proven disappointing – consequently leading to a conclusion that EI has low importance for longer-term measures of career success.
In our new research paper, however, we decided to develop a model that studies the effect of EI ability on career success. We used data from 126 alumni of a large, mid-Western US university who first provided data during their undergraduate studies and since then have worked full-time in various industries over a ten-year time span.
This is important – for career development experts view the first ten years of career life as being the most significant in terms of newbies establishing themselves, working for personal achievement, and aiming for promotion.
Our research paper makes a significant practical contribution, by establishing an empirical relationship between an ability-based measure of EI prior to entering the workforce and an objective indicator of career success several years later. So how did we arrive at this observation?
Social smarts set you apart
We first started out to investigate three hypotheses: that EI is positively related to salary; that mentoring mediates the relationship between EI and salary; and that the impact of EI on salary will be stronger at higher organisational levels than at lower levels. In all three cases, our research supported these hypotheses. How?
Have you ever stepped back to wonder why and how “Colleague X” down the corridor suddenly migrated to the top floor senior management penthouse while you didn’t – even if the results you showed were just as good?
If you did, you might get a picture of the whole system at work – nowadays more of a sprawling livewire network resembling a bustling mind-map than the clear, stable and regimented organisation chart that features on the wall of the office.
You might also realise, as awareness grows, that what is important in such an ecosystem if you want to get things done and the company to move forward is social cooperation. This means building strong, interpersonal relationships, employing networking skills and demonstrating a fair deal of political acumen, all of them critical to achieving long-term career success within a modern company. As such, and given their heightened ability to identify and comprehend the importance of emotions, individuals with high EI are likely to become more deeply embedded in the firm’s social network, gain access to information and knowledgeable colleagues, and improve performance – which in turn leads to higher compensation.
An advisor makes you wiser
Some of us were lucky enough to have more gentle and positive mentors than others. Usually, mentoring consists of a more experienced, older colleague accepting to show a younger newcomer the ropes. This implies a contribution of time, energy and resources for the junior’s career and personal development.
Here, EI helps in several ways: high EI individuals are more open to accepting feedback and insights into low performance, low EI individuals being less willing to pursue paths to self-improvement. In addition, high EI individuals’ capacity to perceive, understand, and manage emotions help enormously in dealing with complex interpersonal, anxiety-generating situations. Imagine a mentor, over-stretched for time and voicing their frustration. That has to be effectively and calmly dealt with.
And finally, mentoring is a two-way deal that involves decisions to mentor or not based on cost and benefit – mentors obviously prefer to hedge their bets on protégés perceived as strong in interpersonal skills, equipped with a strong sense of self-awareness and possessing willingness for self-improvement. Simply put, high EI newbies are more attractive to potential mentors.
The higher you go, the more emotionally so
While EI is important at all stages of a career, we argue that it becomes all the more important as you rise in the organisation. This is because the nature of the manager-leader function changes the higher you rise from an operational to a more strategic role. And who speaks of strategy, speaks of the importance of convincing, inspiring, persuading, building rapport, and managing uncertainty and stress.
In this context, we would imagine EI to have a greater impact on salary at higher organisational levels: after all, emotions are directly linked to the power structure of social relationships, often used to convey standing in social situations. Moreover, the ability to form strong networks is all-important in reaching consensus and pushing through ideas.
It is also equally as useful when dealing with macro-level decision-making. Indeed, our research results point towards the conclusion that there is a clear correlation between the salary and higher levels of EI.
Let’s get practical
The practical implications of our research extend beyond the mere indication that eager executives should now begin to up their EI skills. On the one hand, HR development functions within organisations could tailor career paths to ensure that employees and high potentials have the skills and support necessary for career success. On the other hand, while EI may develop throughout a person’s studies and life experience, research results point to EI as being of particular utility at the start of a career as a good omen of longer-term career success.
As such, education – on-the-job training, but more particularly business and management schools – may wish to take this into account when designing new programmes. Moreover, organisations both in the educational and business sectors would be wise to focus on socio-emotional skills as well as cognitive skills during the student and employee selection process.
And lastly, the mediating and career-enhancing role of mentoring can be strengthened and encouraged. This suggests an important role for organisation-sponsored mentoring programmes and also an effort to offer less emotionally intelligent employees mentoring assignments that integrate interpersonal coaching and social skills training.
Against this, the legacy of the “rational manager” still remains in many organisations. Within this mindset, “correct” business decisions and initiatives are deemed unfit for any interference of a non-logical kind.
Why not ask a rational manager about their pay packet? You never know – they may get all emotional about it.
This article is based on the research paper A Time-Lagged Study of Emotional Intelligence and Salary, published with Professor Ramaswami's colleagues Joseph C. Rode (Miami University, Ohio), Marne Arthaud-Day (Kansas State University), and Satoris Howes (University of Portland), in The Journal of Vocational Behaviour.
About the author:
Professor Aarti Ramaswami is an Associate Professor in the Department of Management at ESSEC Business School.