The existing empirical findings on the connection between emotional intelligence (EI) and sales performance are inconsistent. Possible reasons are examined: The non-linearity of the relationship between EI and sales performance as well as the interaction of EI with professional skills and demographic variables. The empirical research was conducted as a census of sales representatives within the Austrian branch of an international company in the construction sector. Data was collected using three different methods to reduce effects appearing from method variance. Hierarchical regression modeling including three-way-interaction analysis was applied. Results show a direct relationship between EI and sales performance in the form of an inverted ‘U’ as well as moderating effects of EI on the relationship between selling (but not technical) skills and sales performance. Higher order inter-action analyses reveal compensation effects of professional experience, age and education as well as EI. Younger sales representatives, such with less experience, and those with less formal training use EI more strongly to turn their selling skills into sales success. Implications for marketing and sales practices include: EI contributes to sales performance in B2B companies, also in the construction sector, often referred to as ‘unemotional’. The effect is non-linear, which means that the ‘the-more-the-better’ paradigm is to be critically questioned when selecting sales staff. For tasks requiring a high percentage of technical competence, the effect of EI is less (it can even be negative) than in tasks that primarily require sales skills. Sales and marketing managers should consider EI in recruiting and personnel development. Particular attention should be paid not only to sales staff with weak, but also to those with very strong EI levels. As the results of this study are subject to high cross-cultural variability, thoughts on potentially different results in other than the Austrian cultural zone are provided.
1 Introduction
Personal selling contributes to success in business-to-business industries (Singh and Koshy 2010). Effective job performance arises when the person’s capabilities are consistent with the job demands and the organizational environment (Boyatzis 2008). The „ideal” salesperson should exhibit both job-related skills (i.e. knowledge, technical, and professional abilities) as well as emotional intelligence (EI) related competencies and experience in order to perform their jobs efficiently. However, salespeople might vary to the extent in which they exhibit these competencies. Prior research has extensively investigated the direct effects of EI and performance, of EI and skills, and of skills and performance. However, compound effects and interactions of those variables have been rarely examined. Grounded in the work on trait emotional intelligence (TEI) (e.g. Petrides 2010b; Boyatzis 2008) model of performance, and on self-efficacy theory (Bandura 1977), this paper proposes a conceptual framework in the B2B sales context that examines direct and interaction effects of EI with skills, job experience and education, and their effect on sales performance.
2 Conceptual framework and hypothesis development
Our conceptual framework proposes direct non-linear effects, two-way interactions of sales/technical skills and TEI in explaining the variance of sales performance as well as three-way higher-order interactions including sales experience and formal education. Below, we elaborate on the major components of our conceptual framework followed by our hypotheses.
2.1 Trait emotional intelligence
EI plays a role in performing sustainable exchange processes (Lawler 2001). TEI theory is based on the concept of emotional self-efficacy, comprising self-perceived skills and behavioral dispositions on lower levels of personality hierarchies (Reichert 2013, p. 28). In contrast to ability measures which compare the measured levels of EI with an externally determined „maximum value”, TEI theory states that the relevance of different EI profiles can vary with contexts (Petrides 2010a). TEI theory is applicable for analyzing sales performance and its predictors because (i) it abandons the idea of measuring against a predefined „maximum” level of EI, and accepts the subjectivity of emotional perception and emotional self-efficacy, (ii) it is applicable throughout different contextual settings, and (iii) prior operationalization of TEI across disciplines provides evidence of solid psychometric properties.
2.2 Sales skills, technical skills and sales performance
In technical sales, sales people are required to present and explain technical products, solve customer problems, and sell complex products and services to create revenue and accomplish their planned targets, which necessitates the use of both sales presentation skills and technical skills. Selling skills are learned proficiencies at performing job activities. They are important determinants of job performance (Churchill Jr. et al. 1985). Such skills include both technical skills (i.e. technical knowledge, specialist knowledge and knowledge about the company’s products/services etc.) as well as sales presentation skills (i.e. knowledge about sales procedures, handling customers and their objections, abilities to convince the customer to buy etc.). Ultimately, sales performance is what is expected of sales people (Campbell et al. 1993). Our measure of salesperson performance is derived from the company’s database and ensures that salespeople are evaluated against factors which they can control (Cravens et al. 1993), while controlling somewhat for external artifacts (e.g. economic situation, competitive or customer-based volatility etc.).
2.3 Non-linear relationships
Influential ancient philosophers like Aristotle, Socrates, or Confucius have introduced concepts like „happy medium” or „doctrine of the mean” (cf. Phillips 2011 or Legge 1983). However, modern management literature and research only scarcely discusses this phenomenon. Most contributions refer to the „shortage”, only few address the „excess” of characteristics. This is why the assumption of „the-more-the-better” still serves as a paradigm in many models, hypotheses, and statistical procedures, meaning that maximising the input automatically leads to maximization of the output. With respect to emotional intelligence, Salovey und Mayer (1990, p. 198) warned of this ambivalence:
„On the positive side, they may enhance their own and others’ moods and even manage emotions so as to motivate others charismatically toward a worthwhile end. On the negative side, those whose skills are channeled antisocially may create manipulative scenes or lead others sociopathically to nefarious end.”
Also, the overstimulation hypothesis helps to understand, why too high levels of certain professional characteristics may lead to a hyperstimulation and hence are dysfunctional for performance (Singh 1998, p. 72):
„[…] there is an overstimulation effect, so that excessive levels of job characteristics, including feedback, participation, variety, and autonomy, hinder rather than help a person’s performance.”
Kopelman et al. (2006) emphasized the „strategic display of emotions”. Negotiators might consciously use emotions in difficult situations, e.g. to motivate a non-co-operative negotiating partner to cooperate. Thus, the targeted use of emotions is also a basis for negotiation strategies and tactics. On the one hand this is a crucial tool for negotiators who rely on their intuition, on the other hand negotiators can try to „fake” their own emotions and their feelings about themselves, and act „strategically”, or sometimes dishonest in order to influencing their counterpart’s behaviour. The effect of emotional intelligence on performance in this case depends on whether the manipulation is detected or whether there is at least a suspicion of manipulation and therefore uncertainty increases (Kopelman et al. 2006). Another phenomenon to be mentioned in the context of the present study concerns the expression of „played” emotions, which is discussed in the literature as „surface acting” (Mikeska et al. 2015). With „surface acting”, a person tries to change her behaviour in such a way that it corresponds to their expected emotional expression of the counterpart. It shows emotions that are not felt in this way. True emotions are suppressed and unimagined emotions are simulated. For example, a salesperson can be friendly in talking to an angry customer, even though he does not have that feeling in the moment (Grandey 2003).
3 Direct and indirect effects
Based on sales efficacy theory (Bandura 1977) and Petrides‘ (2010a) theory of emotional selfefficacy, a direct relationship of sales performance and emotional intelligence is assumed. Performance is related to self-efficacy, namely the trust that one’s own traits, skills and knowledge help to achieve goals. This is also supported by dual process theories (cf. e.g. Chaiken and Shelly 1980; Cacioppo and Gardner 1999; Evans 2003; Kahneman and Tversky 1979) and trait activation theory (Tett and Guterman 2000). However, the theoretical, conceptual and empirical contributions on non-linear relationships shape our argument in a way that there is an optimum level of TEI, which is located at the inflection point of a curved regression line. Below and beyond this level of TEI, performance declines: H1: The relationship of TEI and sales performance is inverted U-shaped, i.e. with increasing levels of TEI, performance increases, and, at a certain inclination point, performance decreases again with increasing TEI.
3.1 Interaction of EI, sales skills/technical skills and sales performance
Past research tested effects of either EI and sales performance, sales skills and sales performance, each bilaterally, independently, and with inconsistent findings. Whereas some work finds a positive relationship between EI and performance (e.g. Kidwell, Hardesty, Murtha, and Sheng 2011; Lassk and Shepherd 2013), other research has reported only a weak relationship between the two constructs. The relationship between skills and sales performance also exhibit a large amount of variation. Consequently Churchill et al. (1985) suspect „that one or more variables moderate the relationship between skill level and performance” (p. 109). We, thus, argue that the inclusion of additional interaction variables might shed more light on these inconsistent relationships. Self-efficacy theory provides the background for the proposed interaction effect of EI and skills. Emotional self-efficacy is the belief of a person that he or she possesses the emotional traits and abilities to accomplish the task given to him/her successfully (Petrides 2010b). A salesperson who is aware of his/her abilities and uses emotions to deal with the customer in an appropriate way, will exhibit better performance when using his/her acquired skills (Barling and Beattie 1983). It is argued that TEI interacts with skills in explaining performance. The following hypothesis is proposed: H2: Trait EI moderates the relationship of (a) sales skills, and (b) technical skills with sales performance. Higher levels of trait EI increase the effect of sales/technical skills on sales performance.
3.2 Higher-order effect of sales experience
Sales experience refers to a sales person‘s gaining of wisdom through sales encounters, discussion, and negotiations with different clients as well as the experience of success or failure of various sales strategies which accumulate over time (Ramendra Singh and Gopal Das 2013). Distinguishing between inexperienced and experienced sales people, Bartkus, Peterson and Bellenger (1989, p.15) state that „It is possible that inexperienced salespeople perform well by working harder while experienced salespeople perform well by working smarter.”
The interaction of experience and skills can be explained through learning curve effects (Leslie and Holloway 2006) wherein, salespeople, for example, share analogies and cases that they experienced with earlier customers to substantiate their current solution offerings (Wierenga and van Bruggen 1997). As such, it can be argued that, if experience and skills accumulate, the influence of additional components might naturally decrease. Hence, the more experienced a sales person is, the less he/she is dependent on additional traits or competences and TEI and experience reciprocally heighten each other’s influence on the skills and performance relationship. We state: H3: The interaction of trait EI with (a) sales skills and (b) technical skills and sales performance varies with the level of sales experience. With higher levels of sales experience, the moderating effect of trait EI decreases.
3.3 Higher-order effect of formal education
Education refers to the credentials or degrees an individual has obtained through educational facilities. Prior research has established a positive linkage between education and sales performance (Bolander, Bonney and Satornino 2014). Education is also related to selfefficacy, i.e. the belief of a person to be equipped with the abilities that are necessary to act in a way which is beneficial for achieving his/her goals (Bandura 1977). Self-efficacy should help sales people to be convinced of their potential and should allow sales people to better exploit their capabilities, and thus strengthen the relationship of skills and performance. Trait EI has been equated to emotional self-efficacy (Petrides, Pita and Kokkinaki 2007). If formal education is high, self-efficacy is established, and the positive effects of education and TEI may cancel each other out. As such, we can postulate: H4: The interaction of trait EI with (a) sales skills and (b) technical skills and sales performance varies with the level of formal education. With higher levels of formal education, the moderating effect of trait EI decreases.
4 Methodology
The study was conducted among sales people of the Austrian branch of an international company developing and marketing products and services for the construction industry. The company employs a personal selling approach, which puts the salesperson and his/her competencies, traits and skills in the center of the company’s revenue generation efforts. Three data sources were used in order to avoid common method variance issues. To assess trait EI, sales people were asked to complete a paper-and-pencil questionnaire (N=85). To make the questionnaires identifiably and to be able to connect the results with the supervisors’ evaluation and the company records, the respondents added their staff number.
The majority of the sample were male (92.8 percent), mean age was 35.5 years (min = 21.0, max = 61.0, SD=9.48). The average experience in sales was 10.94 years, the tenure with the current company was 8.24 years and the highest completed education was 67.0 percent primary/vocational education, 17.0 percent secondary education, and 16.0 percent tertiary education. Sales people’s sales and technical skills were measured through the assessment of the supervisors. Each supervisor manages 5-7 sales people, with whom he/she is in ongoing personal contact via group and individual meetings. Supervisors get feedback from customers about the behavior and performance of their sales people, and hence should be able to assess the skills of their sales representatives. As a third source of data, the company provided performance records.
4.1 Measures
Trait EI was assessed using the Trait EI Questionnaire (TEIQue), reported by Petrides and Furnham (2009). For the present study, the short version (SF) in German Language was used, which has been validated by Freudenthaler et al. (2008). Sales skills and technical skills were measured by scales developed by Rentz et al. (2002) and Johlke (2006). For objective performance, the company’s data warehouse provided a ratio of planned and actual contribution margins per sales person based on past performance (min=.67, max=1.33, mean=.9598, SD=.144).
Contribution margin was used instead of turnover, as it more directly contributes to company performance and as it is more robust against outliers and large single sales. Education was provided by the sales representatives and was coded categorically with two values, labelled „low” and „high”. Low education means completed basic education including vocational education. High education means completed high-schools with A-Levels (equiv. „Mature/Abitur”in the German speaking area) or a university degree, starting form an undergraduate („Bachelors”) degree. Sales experience in years/month and tenure with the company in years/month as sales representative was assessed through a self-report completed by sales representatives.
4.2 Results
Hierarchical regression analysis was performed to study the relationships. The first hypothesis intended to reveal a non-linear relationship between TEI and sales performance in the shape of an inverted U’. To analyze this relationship, a linear as well as a quadratic model was submitted to regression analysis. The results showed clearly that a quadratic model is better able to describe a significant relationship (β = -.602, T = -6.511, p = .000; R² = .299) than a linear expression (β = .056, T = .556, p = .579; R² = .034). Univariate ANOVA with three groups of EI – low, medium and high – F (2.,97) = 10.068, p = .000) and Tukey HSD-Post-hoc-test (lowmedium = -0.788, p = .002), (medium-high = .946, p = .000), (low-high = .1576, p = .763) support the assumption of a inverted U-shaped regression curve. As, such, H1 proposing a non-linear relationship in the form of an inverted U-shaped curve is confirmed.
In the second set of hypotheses, an interaction effect of TEI on the relationship of sales/technical performance and sales performance was proposed. As an independent variable, TEI had no significant effect on sales performance (β = 0.060; t = .623; p = .535). Sales skills had a significant effect on sales performance (β = 0.313; t = 2.361; p = .02). As an interaction variable on the relationship of sales skills and sales performance, the effect of TEI was significant (β = 0.430; t = 3.360; p = .001). The effect size was increased by 0.117 through the interaction. For technical skills, no significant direct and interaction effects were found. As expected at high levels of TEI, higher sales skills lead to higher performance. However, at low levels of TEI, an increase in sales skills leads to a decrease in performance.
The third set of hypotheses introduced a higher-order moderating effect of sales experience on the interaction of TEI with the skills-sales performance relationship. To analyze this effect, the dataset was split into two groups with (a) low, (b) high sales experience. Only for the group highly experienced in sales, significant effects were found. The interaction effect of TEI and sales skills on performance was significant at (β = 0.68; t = 3.69; p < .01). The direct effect of technical skills on sales performance was also significant (β = -0.36; t = -2.11; p < .01). However, this effect is negative, which means that, within this group, greater levels of technical skills lead to lower performance. This is a surprising result which needs more investigation.
Hypotheses 4a and 4b referred to the higher-order effect of formal education on the interaction of TEI with the skills-sales performance relationship. To reveal interaction effects, the dataset was split into two groups, primary education and secondary/tertiary education. Only within the primary education group, significant effects were found. In this group of sales people, sales skills have a direct effect on sales performance (β = 0.33; t = 2.14; p = .04). This effect is slightly higher compared with the whole sample (β = 0.31). Also there is a significant interaction effect of TEI and sales skills with respect to sales performance (β = 0.45; t = 2.70; p < .01). This effect is also slightly higher compared with the whole sample (β = 0.43). There were no significant relationships found with respect to the group comprising secondary and tertiary education.
High scorers in EI within the group with primary education only are able to transform sales skills to performance seemingly better than low scorers in TEI. The interaction effect of EI the selling skills – performance relationship is strong for the low education group (β = 0.45; t = 2.70; p < .01). Given the fact that within this group, a large majority has an education following the dual system of attending school and practical apprenticeship (which is very popular in the German speaking region, including Austria), this finding is interesting. It could be argued that with a lower level of formal education the effect of TEI becomes very important and perhaps compensates the lack of higher education, which provides confirmation to our hypothesis 4a.
Not hypothesized and because of curiosity, an additional analysis was performed. Two groups were defined within the dataset, one combining low education and high TEI, the other one with high education and low TEI. If TEI outperforms education, the sales skills – performance relationship should yield better coefficients with the low education/high TEI combination rather than with the high education/low TEI set. This analysis has to be interpreted with caution due to the small sample size within the groups (low Education/high EI: n = 35; high Education/low EI: n = 16). Analysis revealed a significant effect of sales skills on sales performance within the low education/high TEI group (β = 0.490; t = 3.23; p < .01). Within the high education/low TEI group, no significant effect was found.
5 Discussion
This research revealed some surprising and relevant relationships when analyzing direct as well as interaction and higher order effects. First, hierarchical regression showed that TEI does not have a linear positive effect on sales performance. Rather this relationship is curved and it has an inclination point that turns increasing TEI to the negative with respect to sales performance. As such, the relationship investigated follows the tradition of the „too-much-of-a-good-thing” effect.
Secondly, the effect of sales skills on performance increases with higher levels of the salesperson’s EI. Beyond that, at low levels of EI, higher sales skills can also negatively contribute to performance. As such, EI moderates the way in which a salesperson tries to convince the customer. Low levels of EI might lead to misinterpretation of situations, the sales person might (unknowingly) exert too much (or too little) pressure on the client, because the former is not able to read the latter’s emotional state and preparedness for closing a deal. Or, the sales skills exerted by the salesperson might not sound authentic to the buyer. The latter one might become mistrustful or hesitant.
Thirdly, sales experience leads to a stronger effect of sales skills on sales performance, and also the moderating effect of TEI on this relationship becomes larger with higher sales experience. Sales people with high levels of experience are better able to transform their sales skills into performance, and if they have higher levels of TEI, the effect is even larger. With respect to technical skills, the data shows a significant, but negative effect of technical skills on sales performance within the group of higher experienced sales people. Perhaps, high experience together with high technical skills leads to overestimation and arrogance in dealing with the customer, which the latter one does not appreciate.
Finally, the higher-order effect of formal education was confirmed only for the primary education group. A large majority of this group has enjoyed a dual education of attending school and practical apprenticeship (which is very popular in the German speaking region, including Austria). We argue that with a lower level of formal education the effect of EI becomes very important and perhaps compensates the lack of higher education.
6 The cultural variable
It might be considered as a limitation that this research has been conducted in own geographic and cultural area (Austria) and within one „company culture” only. When introducing cultural variability to this topic, two main aspects emerge. First, the relationship of culture and emotional intelligence: Which kinds of emotions are shown and how emotions are communicated differs across cultures. Emotional intelligence can be viewed as a crucial aspect for successful management. An interesting study provided by Gunkel et al. (2014) revealed a small but significant effect of cultural dimensions in explaining the variance for the four EI competencies. The second aspect comprises the relationship of sales performance and culture. In his seminal contribution, Salacuse (2005) describes the many „[…] ways that culture can affect your negotiation”, concluding that culture has an impact on how successful negotiations will be or not. Combing these two effects (culture on EI, culture on negotiation), it would be very interesting to analyze the effect of EI on negotiation under the interaction of culture. To do so, we suggest the following model for further consideration:
Figure 1: Conceptual model of EI and Sales Performance, cultural dimensions included.
Source: Author
7 Theoretical and managerial implications
The findings advance theory in marketing by providing a better understanding of the influence of trait EI on performance in a B2B selling context. Trait EI is a driver of sales performance, however, if available in excess, it might be detrimental for performance. Striving for ‘the-more-the-better’ with respect to TEI should be discussed with caution. Also, trait EI is a moderator of the skills-performance relationship, and low levels of EI not only weaken this relationship, but also turn it into the negative. Less formally educated sales people gain more from their EI than those with higher education. EI seems to be able to compensate for formal educational qualifications. For managers in the field of sales, marketing or HR, the study helps to better grasp the EI construct and its relevance for sales representatives. Considering the EI of sales representatives, measuring it, and perhaps, undertaking actions to increase the awareness for and the competences in EI, would be pertinent for recruiting and staff development practices in sales organizations. But on the other hand, an exaggeration in training of EI competencies might have negative effects as well. Avoiding extremes might be a good advice with respect to the key variable analyzed in this paper. Practitioners should take care of EI when recruiting staff members, and also when selecting them for training and promotion. They should take care of the fact that there is no „low” or „high” EI effectiveness, but just „right” or „wrong” jobs for people with specific EI traits.
8 Avenues for future research
As with most research, ours is not explaining „the world”. Some interesting prospects for future research are at hand. First, replicating the study with different businesses, company sizes and geographic areas would increase the variance explained and may also introduce additional interacting variables to be considered in future empirical work. Also increasing the sample size of sub groups should be considered in the future in order to improve the robustness of the findings. Additional independent variables such as cognitive abilities or customer orientation could enrich the model. Very important, the cultural variable needs empirical substantiation through additional studies. Finally, the perspective of the client should be integrated in future research. How do customers perceive their sales representatives’ EI, and how does this affect the buyer-seller-relationship beyond performance measured in this study? This is an important avenue for future research.
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Kľúčové slová/Key Words
emotional intelligence, sales performance, cross-cultural adaptability, sales skills
emocionálna inteligencia, predajný výkon, medzikultúrna adaptabilita, predajné zručnosti
JEL klasifikácia/JEL Classification
M31
Résumé
Vzťah medzi emocionálnou inteligenciou a predajným výkonom v prostredí B2B; s dopadmi na medzikultúrnu adaptabilitu
Existujúce empirické zistenia o súvislosti medzi emocionálnou inteligenciou (EI) a výkonnosťou predaja sú nekonzistentné. Vyhodnotené boli nasledujúce príčiny: nelinearita vzťahu medzi EI a predajným výkonom ako aj interakcia EI s odbornými zručnosťami a demografickými premennými. Empirický výskum bol realizovaný medzi obchodnými zástupcami v rakúskej pobočke medzinárodnej spoločnosti v odvetví stavebníctva. Údaje sa zbierali použitím troch rôznych metód za účelom zníženia vplyvov vyskytujúcich sa v metóde rozptylu. Využité bolo hierarchické regresné modelovanie vrátane trojcestnej interakčnej analýzy. Výsledky poukazujú na priamy vzťah medzi EI a predajným výkonom vo forme invertovaného „U“, ako aj zmierňujúcimi efektmi EI na vzťah medzi predajnými (ale nie technickými) zručnosťami a predajnými výkonmi. Interakčné analýzy vyššieho rádu odhaľujú kompenzačné účinky odbornej praxe, veku a vzdelania, ako aj EI. Mladší obchodní zástupcovia, ktorí majú menej skúseností a tí s menej formálnym vzdelávaním využívajú EI silnejšie na to, aby svoje predajné zručnosti premenili na predajný úspech. Dôsledky pre marketingové a predajné praktiky zahŕňajú tieto zistenia: EI prispieva k výkonnosti predaja v podnikoch B2B a to aj v odvetví stavebníctva, často označovanom ako „bez emócií“. Efekt je nelineárny, čo znamená, že paradigma „viac-lepšie“ sa pri výbere predajcov kriticky spochybňuje. V prípade úloh vyžadujúcich vysoké percento technickej spôsobilosti je účinok EI nižší (môže byť dokonca negatívny) v porovnaní s úlohami, ktoré si vyžadujú predovšetkým obchodné zručnosti. Manažéri predaja a marketingu by mali zvážiť EI pri nábore a personálnom rozvoji. Osobitná pozornosť by sa mala venovať nielen predajcom so slabými, ale aj veľmi silnými úrovňami EI. Keďže výsledky tejto štúdie sú vystavené vysokej medzikultúrnej variabilite, v príspevku sa uvádzajú postrehy na potenciálne odlišné výsledky v inej ako rakúskej kultúrnej zóne.
Recenzované/Reviewed
8. March 2019 / 10. March 2019