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How Soft Skills Affect Leadership and Performance in the Workplace

In this series, “The Ultimate Guide to Soft Skills for Managers,” the aim is to fully explain the importance of soft skills in the workplace plus provide tools and training for building them.

The primary misunderstanding about soft skills is that they’re optional; that hard skills are “must-have” while soft skills are merely “nice to have.” The cost of neglecting soft skills development is substantial to individual leadership and company performance alike.

Graphic Showing a Giant Destroying The Dwarf's PropertiesTake effective listening, just one soft skill, as an example. A Holmes Report, The Cost of Poor Communications, found that poor listening resulted in:

  • Lost contacts
  • Inaccurate reporting
  • Obstructed workflow
  • Rework
  • Unhappy customers
  • Reduced productivity

In Fortune 500 companies, these losses added up to $37 billion. (If you’re interested in improving listening skills in your organization, try the ECHO Listening Profile and work with your team on their listening habits.)

It all makes sense once you understand employee engagement.

Employee Engagement is a heightened emotional connection an employee feels toward their organization that influences them to apply additional discretionary effort to their work.”

There are two elements to consider in this definition from the Corporate Executive Board:

  1. the heightened emotional commitment that yields
  2. additional discretionary effort

It all starts with the emotional commitment. Managers with stronger soft skills foster heightened emotional connections.

Soft Skills at Work: The Undeniable Impact of Emotional Commitment in Leadership

Rational Commitment

Rational commitment stems from extrinsic motivation, i.e.:

  • The chance for a pay raise
  • The fear of being fired
  • The desire to earn praise or recognition
  • The fact that others are counting on you

When managers look for ways to motivate employees, they turn to extrinsic motivators. Sales managers offer spiffs and commission pay. Production supervisors offer awards for meeting safety and quality standards. Merit raises, offered in any functional area, serve to motivate performance by dangling an appealing carrot.

Some managers rely on negative extrinsic motivation, using threats and authoritative styles to push employees. These bosszillas create negative emotions and have actively disengaged employees who only work hard when the boss is looking. Their emotional commitment is nil.

Emotional Commitment

Positive intrinsic motivation is far more powerful. It comes from within an individual and causes them to take actions solely for their own internal satisfaction or fulfillment. When we do something that’s personally gratifying, the motivation is sustained longer and drives us harder (even when no one’s watching). Unlike rational commitment, this connects us to our work through an emotional commitment to it.

CEB research reports that “Emotional commitment is 4x as valuable as rational commitment in producing discretionary effort. Indeed, the search for a high-performing workforce is synonymous with the search for emotional commitment.”

Emotional commitment is also heightened by the behaviors and attributes of the direct supervisor a person reports to. “The manager has tremendous impact on employees’ levels of commitment to the team, organization, and job” (Source: The Corporate Leadership Council).

Your Leadership Behavior Should Sound Like This

There are, in fact, 30 behaviors proven to boost employee engagement by building emotional commitment. These behaviors are grouped into five clusters, collectively known as The Five Practices of Exemplary Leadership® from Jim Kouzes and Barry Posner. (If you’re interested in a 360-degree assessment that measures these behaviors for your team, learn more here.)

Many of these behaviors are … you guessed it … based in soft skills. None of them are technical or functional (hard) skills. Further research has shown that nothing increases emotional commitment and employee engagement more than these behaviors being demonstrated more frequently by company leaders and front-line managers.

Research aside, consider your own experiences and observations. Think about the times you’ve worked the hardest and been the happiest in your career. You can recognize, in yourself, a heightened emotional commitment that superseded the extrinsic factors influencing your performance. Chances are that you felt a sense of belonging and were inspired by the team leader to do your very best because you believed in the goals and work.

Common sense also edifies the importance of employees having an emotional commitment. When an employee feels emotionally connected, they are less likely to look for greener pastures or be enticed by other offers. One study from CEB found that “Employees with lower engagement are 4x more likely to leave their jobs than those who are highly engaged.” A Gallup study affirmed this, reporting that in one organization, business units with low engagement levels averaged 31-51% more turnover than the business units with the highest engagement levels.

The impact of retaining employees and reducing turnover is quantifiable. SHRM research concludes that replacing a salaried employee costs an average of 6-9 months’ salary. For an employee earning $50,000, that would be $25,000-$37,500 in recruiting, hiring, and onboarding costs. Note: Lost revenue, slowdowns, and overtime costs (as other employees fill in for the open job) are not included in this calculation. If your organization replaces 50 salaried people a year, that’s a minimum cost of over $1 million.

Of course, high turnover also:

  • Slows hiring due to tarnished employer image
  • Diminishes customer satisfaction
  • Adversely affects productivity, innovation, and market share

Better to have emotionally committed employees who stick around!  

Now Add in the Impact of Discretionary Effort

That’s only half the equation. People who stick around have more experience and institutional knowledge, so they are more likely to post higher productivity and keep customers more satisfied. Retaining employees also reduces the expenses related to recruiting, hiring, and onboarding.

The second part of the employee engagement definition refers to the additional discretionary effort that is triggered by a heightened emotional connection.

The impact of additional discretionary effort is also profound.

Discretionary effort is the level of effort people could give if they chose to, above the bare-minimum effort required. It’s often described as “above and beyond” or “going the extra mile.”

Every employee has certain times and tasks in which they pour on extra effort. Typically, these bursts of energy are linked to the work being stimulating and to an emotional commitment. Here again, you can weigh your own experience and observations to see how this plays out.

When employees exert extra energy and effort, productivity levels rise. A wide variety of studies show links between engagement and productivity as measured by:

  • Less absenteeism and tardiness
  • Fewer worker’s compensation claims
  • Higher output in a given time period
  • Improved quality and fewer errors

When emotional commitment leads to additional discretionary effort, productivity soars. In turn, thanks to faster output and better quality, customer satisfaction rates dramatically improve. Gallup findings: “Organizations with above-average levels of employee engagement reap 50% higher customer loyalty levels.”

Naturally, when customers are happy and loyal, revenue increases. Higher sales, coupled with reduced expenses (savings from retaining employees + higher productivity rates), means that profit margins also improve. Following an extensive research project, Hewitt Associates said “Employee engagement scores were 21% higher in double-digit- vs. single-digit-growth companies.”

This is why employee engagement -- the combination of a heightened emotional connection and additional discretionary effort -- is “the primary enabler of successful execution of ANY business strategy.” (Source: DDI, Employee Engagement: The Key to Realizing Competitive Advantage)

Remember, though, all of this gets unlocked by a manager’s soft skills.

YOU Choose Your Own Behaviors and the Impact You’ll Have

It’s up to you. As a manager, working on your soft skills impacts your team’s performance and the company’s health.

“The best leaders elicit 3x the amount of talent, energy, commitment and motivation from employees compared to the counterparts,” wrote Kouzes and Posner in Great Leadership Creates Great Workplaces.

It’s absolutely worth it to develop soft skills that make you one of the “best leaders” who elicit more from team members.

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