Like you, Alan Hughes believes employees should check their personal problems at the door when they enter the office. But Hughes, CIO of GE Commercial Distribution Finance in St. Louis, also realizes that doing so is not always realistic. "We all go through different crises in our lives. They're distractions. You can't help but bring them to work, either consciously or subconsciously," he says.

Hughes injects this understanding into his work, and it pays off. Recently, one of Hughes' direct reports—a valued employee—knocked on his office door and told him that she was going through a divorce. She said she didn't think it would affect her performance. But she was late for work. She missed meetings. Her performance slipped. Hughes talked to her. "I said, 'I know you're going through a difficult time right now. One thing that I ask is, if you're not going to be in a meeting, please let me know,'" he recalls. He also worked with her and other members of the department to lighten her workload and lengthen some project deadlines. In so doing, Hughes and his team were still able to meet project milestones.

"As a leader, it's important to know those things [going on in people's personal lives] so you can make adjustments," says Hughes, who is 43 years old. If you don't, he adds, "projects will fail. Things won't get done on time. If you know what's going on and you can manage around it, chances are you can help them through their problems better too." Not to mention retaining a proven performer. Hughes incorporates what psychologists call emotional intelligence (E.I.) into his management style, and experts say CIOs would do well to follow suit.

The term emotional intelligence refers to a person's ability to take control of situations by tuning in to and managing one's own and others' emotions. The approach can mitigate the emotional toll personal problems and organizational changes like layoffs and mergers can have on those involved. It can help managers keep employee turnover low and projects on track.

It may sound touchy-feely, but it's not, says Wendy Alfus Rothman, president of The Wenroth Group, a human resources consultancy in New York City. "E.I. is not just for women. It is not for people that are into harmony and peacefulness. In fact, it is a real intelligence," she says.

Experts argue that E.I. directly impacts productivity and profits. For example: Richard Boyatzis, professor and chairman of the organizational behavior department at Case Western Reserve University in Cleveland, assessed the senior partners in a multinational consultancy and found that those who exhibited E.I. competencies more frequently delivered over $1 million more in annual profits from their accounts than did other senior partners.