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The Truth About Managing People: The Importance of "People Skills"

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Learn why possession of competent interpersonal skills increasingly plays a major role in deciding who is hired, who is retained, and who is promoted in this chapter from The Truth About Managing People: Proven Insights to Get the Best from Your Team, 4th Edition .
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The Importance of “People Skills”

Is there any “critical ingredient” for achieving success as a manager? Is it an MBA from Harvard or Stanford universities? How about specific technical expertise in one’s area of competence like law, computer engineering, or accounting? The answer to our question is “yes, there is a critical ingredient to success,” and it’s good interpersonal or “people” skills. Technical skills may be a necessary qualification for a job, but they’re rarely sufficient. Possession of competent interpersonal skills increasingly plays a major role in deciding who is hired, who is retained, and who is promoted.

What defines interpersonal skills? Although there is no universal agreement, most definitions include oral communication, leadership, motivating others, negotiating, resolving conflicts, and collaboration. In addition to these face-to-face interactions, the term also is expanding to include virtual interactions such as leading virtual teams and electronic communications.

Organizations place a premium on hiring people with good interpersonal skills.

Study after study has consistently found that organizations place a premium on hiring people with good interpersonal skills. Here are some examples:

  • When 1,400 chief financial officers in the United States were asked “If two candidates interviewing for an accounting or finance position had similar skills, which of the following would you find most valuable—technical knowledge, people skills, industry-specific knowledge, advanced degree, multilingual skills, or international experience?” The overwhelming first choice was people skills.
  • A survey of 330 employers found 96 percent rated communication and interpersonal skills as the most valuable employee trait.
  • A survey of more than 500 European business leaders from 32 European countries rated effective interpersonal skills a far more important quality in potential employees than a strong academic degree or business acumen.

Why are organizations putting a premium on hiring people with good interpersonal skills? The answer lies in the changing way work is done. Today’s employees are increasingly part of a collaborative workplace. Increased collaboration requires increased interaction with others, and successful interaction with others is dependent on interpersonal competence. In addition to interacting with their boss, employees find themselves increasingly as part of a team. And as team members, they have to participate in meetings, communicate clearly, be active listeners, provide feedback, make presentations, negotiate with others, and demonstrate they can be team players. Finally, many employees are expected to work with customers, suppliers, and others outside the organization. No matter how good their technical knowledge, if these people can’t work well with others, their job performance suffers.

Today’s employees are increasingly part of a collaborative workplace.

What’s important for employees in general is even more important for those in managerial positions or those aspiring to a management position. Studies of successful managers—those with high-performing employees and low employee turnover—consistently indicate that they have good interpersonal skills. For instance, a national survey of the U.S. workforce found that wages and fringe benefits are not the primary reasons people like their jobs or stay with an employer. Far more important are the quality of the employees’ jobs and the supportiveness of their work environments. So managers with good interpersonal skills are likely to make the workplace more pleasant, which, in turn, makes it easier to hire and retain qualified people.

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