“Why is it that I always get a whole person when what I really want is a pair of hands?”

—Henry Ford

People problems are a major headache for many managers. People are the hardest to understand and predict among all "objects" one deals with, and people can give surprises to even the most experienced leader. However, a systematic improvement is possible also in this area. Companies that are looking at the psychological connections employees make with their employers, colleagues and customers achieved significant savings and increase of the bottom line. Some figures to highlight the importance of Psychology At Work:

• Companies relying employment tests reported savings of their human capital costs of between 15-25% (Study by University of Manchester, England in 1992, Supervision, 1995)
• The reasons for losing customers and clients are 70% "Psychology At Work"-related (e.g., didn’t like that company’s customer service) (Forum Corporation on Manufacturing and Service Companies, 1989 - 1995).
• 50% of time wasted in business is due to lack of trust (John O. Whitney, Director, Deming Center for Quality Management).
• In one year, the US Airforce invested less than $10,000 for emotional competence testing and saved $2,760,000 in recruitment (Fastcompany "How Do You Feel," June 2000).
• In a multinational consulting firm, partners who showed high emotional intelligence ("Psychology At Work") competencies earned 139% more than the lower emotional intelligence partners (Boyatzis, 1999).
• American Express tested emotional competence training on Financial Advisors; trained advisors increased business 18.1% compared to 16.2%, and nearly 90% of those who took the training reported significant improvements in their sales performance. Now all incoming advisors receive four days of emotional competence training (Fastcompany "How Do You Feel," June 2000).
• After supervisors in a manufacturing plant received training in emotional competencies, lost-time accidents were reduced by 50 percent, formal grievances were reduced from an average of 15 per year to 3 per year, and the plant exceeded productivity goals by $250,000 (Pesuric & Byham, 1996).
• Top performing sales clerks are 12 times more productive than those at the bottom and 85 percent more productive than an average performer. About one-third of this difference is due to technical skill and cognitive ability while two-thirds is due to emotional competence (Goleman, 1998).
• UCLA research indicates that only 7% of leadership success is attributable to intellect; 93% of success comes from trust, integrity, authenticity, honesty, creativity, presence, and resilience (cited in Cooper and Sawaf, 1996).
• At L’Oreal, sales agents selected on the basis of certain emotional competencies significantly outsold salespeople selected using the company’s old selection procedure by $91,370, for a net revenue increase of $2,558,360. Salespeople selected on the basis of emotional competence also had 63% less turnover during the first year (Spencer & Spencer, 1993; Spencer, McClelland, & Kelner, 1997, cited in Cherniss, 2000).
• The most effective leaders in the US Navy were warmer, more outgoing, emotionally expressive, dramatic, and sociable (Bachman, 1988, cited in Cherniss, 2000).
• Workers with high work pressures and poor time management skills are twice as likely to miss work; employees who have strong self-management skills cope better with work pressures (Essi Systems, 1997).

The relation between personality and performance has been proven by many researchers. The biggest scale of research was conducted by Herbert & Greenberg, and the results were published in the Harvard Business Review. The research covered close to 20,000 employees from two industries with high and lower employee turnover rates, and compared retention rate for employees who were hired with and without personality testing.