The Amadori Case: Supplying McDonalds
EQ, Engagement, and PerformanceThis study answers 3 questions:
Does Emotional intelligence affect Individual Performance?
Does Emotional Intelligence affect Organization Engagement?
Does Organizational Engagement impact Organizational Performance?
Abstract
A three-year study of AMADORI, a supplier of McDonald’s in Europe, assesses links between emotional intelligence, individual performance, organizational engagement, and organizational performance. Emotional intelligence was found to predict 47% of the variation in manager’s performance management scores. Emotional intelligence was also massively correlated with increased organizational engagement with 76% of the variation in engagement predicted by manager EQ. Finally, plants with higher organizational engagement achieved higher bottom-line results building a link between EQ->Engagement->Performance. During this period, employee turnover also dropped by 63%.
Emotional Intelligence Impacts Performance
%
of Variation in Managers' Performance Scores Is Predicted by EQ
%
of Variation in Organizational Engagement Scores is Predicted by EQ
%
Is the Difference in Performance Scores Between Highest and Lowest-Engagement Workplaces
How can emotional intelligence help…?
Grow A Manager’s Performance
In this study, the variation in managers’ performance scores was largely predicted by emotional intelligence scores. Learn More
Increase Organization-Wide Engagement
Organizations with high EQ managers are significantly more likely to score high in engagement . Learn More
Create Better Performance
Organizations with high engagement scores and high EQ managers are more productive and have higher employee retention rates. Learn More
“We can certainly say…
that the Six Seconds training proved decisive in pushing managers and middle managers towards improving their leadership skills. Within a few years of using the performance and talent management system, we have witnessed an improvement of the managerial competencies of the whole organization, and especially in those of middle management.”
-Paolo Pampanini, HR Director, AMADORI
1. Does EQ Affect Individual Performance?
To assess this question, two variables were evaluated: EQ scores and Performance scores. EQ scores were measured using Six Seconds’ SEI Assessment. Performance scores were measured using AMADORI’s Performance Management System. The sample was 147 of AMADORI’s managers and middle managers.
Results
The managers in the top 25% of EQ scored higher on the company’s performance management system:
- Highest 25% of EQ
- Lowest 25% of EQ
EQ Scores Predicted 47% of The Variation in Managers’ Performance Results
To assess the power of the relationship between EQ and performance, a linear regression analysis was conducted, revealing a statistically significant positive relationship between the managers‘ EQ scores and their Results scores.
%
Discussion: EQ & Individual Performance
While many studies correlate emotional intelligence with business performance, this finding is unique because of the strong, significant link between the “hard” outcome of results and the “soft skills” of emotional intelligence. Since we know that emotional intelligence is learnable, this finding suggests that massive individual performance benefits can be reached by developing these skills, and by selecting managers who already exhibit these skills.
It’s also worth noting that unlike many of the other studies of emotional intelligence, this study is looking at an industrial sector. Thus, even in a basic infrastructure industry, it appears that emotional intelligence is a critical success factor.
2. Does EQ Affect Organizational Engagement?
To assess this question, two variables were evaluated: EQ scores and Engagement Index scores. The sample for EQ scores was 147 of AMADORI’s managers and middle managers and the sample for Engagement Index scores was three of AMADORI’s largest production plants.
Results
The plants with the highest EQ managers scored higher on the Organizational Engagement Index:
- Plant with Lowest EQ Manager
- Plant with Mid-EQ Manager
- Plant with Highest EQ Managers
Manager EQ Scores Predicted 76% of Employee Engagement
To assess the power of the relationship between managers’ EQ and organizational engagement, a linear regression analysis was conducted, revealing a statistically significant positive relationship between the managers‘ EQ scores and employee engagement scores.
%
Discussion: EQ & Organizational Engagement
The managers’ level of emotional intelligence appears to positively influence employee engagement. While this is a small number of plants, the trend is very powerful. In this sample, 76% of the variation in engagement is predicted by variation in manager EQ — suggesting that increasing manager EQ is imperative for organizations concerned with increasing employee engagement.
3. Does Organizational Engagement Impact Organizational Performance?
To assess this question, two variables were evaluated: Organizational Engagement Index scores and Plant Performance scores. The Organizational Vitality Signs assessment was given to AMADORI’s three largest plants to measure engagement, and AMADORI’s own Global Key Performance Indicator assessment was given to each plant to measure Plant Performance.
Results
The Plant with the lowest level of engagement performed the worst:
- Plant with Lowest Engagement
- Plant with Medium-High Engagement
- Plant with Highest Engagement
High Plant Engagement Correlated with Highest Employee Retention Rate
To assess the power of the relationship between organizational engagement and retention rates, a linear regression analysis was conducted, revealing a statistically significant positive relationship between organizational engagement and retention rates.
- Plant with Lowest Engagement
- Plant with Medium-High Engagement
- Plant with Highest Engagement
Discussion: Engagement & Organizational Performance
While the link between engagement and outcomes as measured by the OVS is well established, this study provides an important additional ingredient. The objective performance data from the company’s Key Performance Indicator substantiates the link between employee engagement and performance. Further, this finding adds evidence that the outcomes measure by the Organizational Vital Signs assessment are linked to “real world” performance.
Conclusion
The study provides evidence to affirm the three of the questions:
- Does Emotional intelligence affect Individual Performance? Yes, strongly.
- Does Emotional Intelligence affect Organization Engagement? Yes.
- Does Organizational Engagement impact Organizational Performance? Yes.
There is strong evidence that emotional intelligence is predictive of individual performance; we found that 47% of the variation in performance is predicted by variation in EQ. Plants with more emotionally intelligent managers had higher organizational engagement. Plants with higher organizational engagement reached better performance.
It appears that Emotional Intelligence, as measured by the Six Seconds Emotional Intelligence Assessment, is a significant (perhaps even essential) capacity not only for individuals but also for entire organizations. These findings suggest that emotional intelligence and organizational engagement are key drivers of performance.
63% Reduction in Personnel Turnover
In addition to the results of the study, one striking result was a drastic 63% reduction of personnel turnover of Amadori’s sales force. Sales managers participated in the EQ training, and the competency framework and manager-coach process was extended to the external sales force (300 sales agents all over Italy). The employee turnover rates are shown in this graph:
- 2010 Turnover Rate
- 2011 Turnover Rate
- 2012 Turnover Rate
Recommendations
For other companies considering this type of implementation, there were several “lessons learned” in the Amadori case. The first is the value of metrics. The project started with robust data and the creation of a meaningful performance management system.
Many organizations are moving toward a “balanced scorecard” approach to performance management. It can be a difficult transition when most operations have traditionally only focused on results. Senior leaders need to be very serious if they are going to commit to measure both the “what” and “how.” In this case, we can see that focus is part of the bottom line too. It’s about having a longer-term vision; if we only focus on the short-term, “good results” in one quarter could actually be undermining value. When those results are created in a healthy way, the organization becomes stronger.
These systems are often imperfect, but Pampanini points out that it’s important to have the data and refine. Using tools like SEI and VS provided normative data that is robust and meaningful for individuals as well as the whole organizations.
This “refining” concept is consistent with the best practices of the Change MAP process. The three stages of Engage, Activate, Reflect are presented in a cycle. A multi-year project goes through this cycle many times, continuously building awareness and commitment. As the project progresses, the people involved become more deeply engaged and build the emotional energy that brings others along (shown in the graphic to the right, the feelings on the outer ring become a driving force for continuous improvement as a learning organization).
Finally, Pampanini points to the importance of HR working strategically as a partner to operational leadership: “We believe that HR systems can produce value only if properly executed by the people within the company. This is why investing in the development of emotional intelligence for all key managers is a critical success factor.”
“This is why investing in the development of emotional intelligence for all key managers is a critical success factor.”
This study originally published April 3, 2013, updated Feb 5, 2019
The Authors
Lorenzo Fariselli
Regional Network Director, Six Seconds Italy
Joshua Freedman
CEO, Six Seconds
Massimiliano Ghini
CEO, MGMTLab
In Collaboration with Fabio Barnabè and Erika Paci of Gruppo Amadori
From Our Clients
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