The HR decision-maker’s emotional intelligence and SME performance

Abstract

Purpose: This paper aims to examine the influence of the emotional intelligence (EI) of the human resources (HR) decision-maker on firm performance in small and medium-sized enterprises (SMEs), as well as the possible mediating role of the use of a system of HR practices in that relationship. Design/methodology/approach: The research involves a sample of 157 managers responsible for HR in SMEs. SMEs are examined because in these firms, decisions are not usually adopted on a collegiate basis. It makes these firms an ideal context for studying the relationship between HR decision-maker’s EI and firm performance. Findings: Results show that the HR decision-maker’s EI determines firm performance in terms of generation of valuable HR and financial outcomes. They also confirm the mediating role of the system of HR practices in that relationship. Research limitations/implications: This research suggests that an adequate understanding of the importance of EI can guide efforts to boost SMEs competitiveness. Thus, as SMEs are an important part of the business fabric in the majority of developed economies, the implications of this study are significant. Originality/value: Findings in this research suggest that the workplace is not managed exclusively on a cognitive basis since emotional competences may play an important role in the HR management and SMEs’ performance.