Effectiveness Of Employee Empowerment

Introduction:

In such a competitive environment, the organizations have to continuously provide quality products, better services and need to bring innovation to stay in the business and generate profits. To conduct such activities, efficient and empowered employees are essential (Bowen and Lawer, 1992; Fulford and Enz, 1995; Bowen and Lawler, 1995).

In the past, the authority was not delegated to the employees and it centered on the managers who were responsible for making all the decisions in the interest of the organizations. This had limited the creativity to show up since the employees were not able to express or share their ideas. Empowerment in the recent years has been considered as the most important factor that contributes to the success of the organization. The creative energy and potentials of employees benefits the shareholders, suppliers and customers as well (Gandz 1990; Appelbaum, Hébert, Leroux, 1999).

Empowerment means delegation of decision making authority when there is a need to take action which is important for both the managers and employees. Following are the main reasons for practicing empowerment in the organization:

It provides fast solutions to business problems

It provides growth opportunities for employees

It helps in lowering organizational cost

Employees benefit from empowerment because they have more responsibility in their jobs. Employee empowerment increases the level of employee involvement and therefore creates a deeper sense of satisfaction and higher levels of motivation. The style of management is changing as the managers are now being considered as the coach, advisors or facilitators. The decision making has been shifted down to the lowest level of the organization.

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According to Rob and Margret brown, ’empowerment’ isn’t just a matter of delegating job authority to the job-holders. It means that ‘everyone can take action to enhance his or her work, either in personal or organizational terms. Instead of the traditional bureaucracy, with its emphasis on control, standardization and obedience, Brown-blessed empowerment can only thrive in the liberated surround of innovation, flexibility, commitment, zero defects and continuous improvement.

Effectiveness of Employee Empowerment:

Employee Empowerment can only be effective when management clearly defines the achievable goals and accountability standards. The management should provide employees with the resources such as time, money, training and relevant and factual information which is supported by the upper and lower management.

The benefits of empowerment can be substantial for the organization but it doesn’t come without costs. If this approach is not properly implemented, it can cause many problems such as bad decisions taken by the employees who are not well-trained, conflict arising between team members reducing the team innovativeness and performance of the employees (Henderson and Lee; Davenport ) and high training costs to successfully operate in the empowered environment.

There are also numerous benefits that are associated with empowerment such as enhanced creativity resulting in increased performance, making cross functional teams of diverse work group for sharing and developing innovative ideas and increased customer service quality by letting them solving the customer problems on their own without waiting for the managerial approval (Shrednick et al., [26]).

Hence we can assume that empowerment is a skill and can be learned. Effective management teams must have a firm grasp on the latest business techniques as well as an understanding of the importance of human potential and high self-esteem. Empowerment is a total commitment to doing business in a productive and positive manner.

The famous researcher John R. Drew proposed Seven Steps to Empowerment. According to him empowerment can be achieved by creating champions, involving people in planning the change, creating team leaders, educating the workforce, changing the support system, practicing consensus decision making and involving people in strategic and tactical planning.

A lot of research has been conducted on empowerment in the last decade to fully understand its impact on the performance of employees and how it effects the organization as a whole. An organization must understand its compatibility with the organization system since its effect varies from organization to organization. The approach is dependent on the organizational structure, its system, its culture, skilled workforce and the attitude of top management toward the “change”.

Before the organizations move to the empowerment approach, they must critically analyze what empowerment basically is and how it’s different from the traditional approach. Empowerment encourages information sharing with front-line workers, rewards based on organizational performance, employee training, and employee involvement in management decision making (Bowen and Lawler).

Most of the researches indicate that the empowerment must be nurtured and supported by the other factors which trigger its effect and produces positive results for the organization such as Autonomy, creativity, level of communication between managers and employees, competency and high self-esteem.

Theories and practices of empowerment:

There has been a lack of theoretical and empirical work being done on practices of empowerment. The term empowerment being used in the business organizations is not clearly defined since it is difficult to understand what the writer is referring to when he uses the term empowerment.

Broadly there are two main approaches that are widely used to understand the concept. Following Conger and Kanungo(1988) and Thomas and Velthouse (1990), spreitzer (1992) refers to these as a psychological and relational perspectives.

Psychological perspective on employee empowerment:

The first approach to study empowerment focuses on the concept that empowerment depends on the perception of employees. If they believe that they are empowered, then they will tend to work with more autonomy ( Spreitzer 1992). Conger and Kanungo(1988), and Thomas and Velthouse(1990) and spreitzer (1992) imply that an employee is psychologically empowered when

(a) he/she finds meaning in his/her role involvement (b) feels efficacious with his/her ability and capacity to perform (c ) has a sense of determination to achieve a desired outcome with his/her role and (d) believes that he/she has control over desired outcomes meaning they have an impact on the large environment.

The relational perspective of empowerment:

The second approach focuses on the concept that how sharing of power is affected by the organizational structures and its cultures. It deals with the organizational structure and culture that it should be designed in such a way that creates an environment to facilitate the empowerment of its members (Bowen and Lawler 1992, Byham and Cox 1998, Jaffe and Scott 1991).

Apart from these approaches, different theories on empowerment were presented by different theorists having opposite view points. Some theorists argue that there should be a relatively uniform understanding of empowerment and they were in the favor of implementing standardized programs (Rumelt 1974; Denhardt 1984; Wallace 1992; Balk, 1996). On the contrary, other theorists were of the view that empowerment is individually, contextually and variably defined (Zimmerman 1995; Quinn and Spreitzer 1997; Foster-Fishman et al. 1998). These researchers think that there exists a wide range of empowerment varying from person to person even in the same work setting, although both the viewpoints were in favor of empowerment.

Each viewpoint is based on the same assumption that employees value empowerment and by exercising empowerment, they can give better outcomes, increased efficiency and performance, increased job satisfaction, and consistent ethical behavior.

Objectives and significance of study:

A lot of conceptual research has been done on empowerment but there is a need of studying the effect of these 5 factors and get a more generalizable result. The main purpose of this research is to explore the relationship between these variables (i.e. Autonomy, creativity, level of communication between managers and employees, competency and high self-esteem) and empowerment of front-line employees of Mobilink Company in Islamabad. We will then further investigate the impact of empowerment on employee performance. Although these relationships have been explored in the Western environment, we will be investigating these relationships in the Asian environment to explore if the results differ in any way or the hypothesis we have created shows the positive results.

Following are the main objectives of this research:

• To understand the core concepts of Empowerment and performance
• To identify the variables and investigate the relationship between these variables and employee empowerment
• To explore the overall impact of empowerment on the performance of Mobilink employees.

Problem statement

The problem statement of our research paper is to study the impact of empowerment being nurtured by the other factors such as Autonomy, creativity, level of communication between managers and employees, competency and high self-esteem on the performance of Mobilink employees.

REVIEW OF RELATED LITERATURE

Sanjay Menon and Clarkson (2001) have tried to explain the psychological approach to employee empowerment in this article. It was developed based on the principal that the psychological experience underlies feelings of empowerment. This article extends existing perspectives of empowerment by integrating the empowering effect of valued goals, such as those provided by transformational leadership. In addition to the two traditional facets of perceptions of control over the work environment and the perception of self efficacy or competence, internalization of goals was also identified as a major component of psychological experience of empowerment. They have also mentioned the implications of defining empowerment as a psychological state and the need of multiple measures of empowerment. They also recognize empowerment as one of the most important strategic tool to motivate employee if the organization are concerned with growth of their employees. (Employee Empowerment: An Integrative Psychological Approach)

John Peter, Patricia Byrnes, Do-Lim Choi, Frank Fagan and Randy Miller (2002) have discussed that the empowerment of public employees is an important mediating step in improving public organizational outcomes, yet such a relationship depends on an assumption that employees value what is offered as empowerment. The empowerment is multidimensional. Survey was carried out to know the opinion of employees regarding empowerment. Employees or Street-Level Bureaucrats were in favor of empowerment because they believe that their skills will improve, they will be able to perform job effectively, they can save a lot of time and they will be able to improve their decision making skills. Empowerment programs consider what each individual employee values. (Dimensions and Patterns in Employee Empowerment: Assessing What Matters to Street-Level Bureaucrats by John Peter, Patricia Byrnes, Do-Lim Choi, Frank Fagan and Randy Miller published in 2002)

Logan and Daniel C. Ganster (2007) report the result of randomized field experiment that tested the effects of an empowerment intervention among unit managers of large trucking company in this article. The intervention has designed to increase participant’s beliefs in their personal control and self-efficacy with regard to key aspects of their jobs. Individuals who managed geographically dispersed profit centers were randomly assigned to either an intervention group (N=38) or a no-treatment control group (N=30).the intervention significantly increased perceptions of maintenance control and impact at four months after the intervention, but only for managers who felt that their supervisors were supportive. The intervention also improved archival measures of unit performance and affected work attitudes (depending upon the level of perceived supervisory support). The data point out the key role that perceived supervisor social support plays when implementing such organizational change interventions.(The Effects Of Empowerment On Attitudes And Performance: The Role of Social Support and Empowerment Beliefs)

Butts, Mike (2004) argues in this article that most of the employees feel frustrated and completely ineffective because of lack of employee empowerment. According to the author, most of the time your manager asks you to do a certain project with full responsibility and when the time comes to implement your strategic plans and action plan, your manager doesn’t support you and your higher-ups don’t give you authority to bring some positive changes or to make some effective decisions. At the end, when the project fails, they ask you that why your performance has not improved. So in simple words, you cannot give someone the responsibility for a job without giving them the means and authority to bring about needed changes. (“Command performance: empowerment is the catalyst for positive corporate changes” By Butts, Mike Publication: Prosales Date: Wednesday, December 1 2004)

Gaynor Borade (2008) discusses about the importance of employee empowerment and how it can be implemented in an organization. Employee empowerment can be attempted via dedicated virtual courses, special employee empowerment workshops by management gurus, dedicated books and articles and even software packages. It can only work if the management team believes in it. The implementation of employee empowerment involves managers willing to give up control in certain areas of work production. The writer argues that the traditional bureaucracy and the age old emphasis on control and standardization are now things of the past. The new vistas involve innovation, flexibility and commitment and consistent improvement. (“Employee Empowerment” by Gaynor Borade Published: 2/23/2008)

Cheryl (2007) enlightens its readers with his view that the most important asset that any company will ever have is its employees. Employees are the backbone of the organizational hierarchy, allowing the employees to accomplish organizational goals by giving them some decision-making ability is the way to enhance the growth and performance of today’s organizations. Empowerment is a process that is adapted through a course of time and gradually, almost effortlessly, comes together. So in this article, the writer explains that how managers assure the employees that empowerment is not only in their own best interest but also for the organization as a whole. (“Employee Empowerment: Organizations Must Take Active Roles” by Cheryl, published Sep 26, 2007)

Susan M. Heathfield basically tries to pinpoint the fact that if employee empowerment is such a powerful tool into accomplishing word, better work more efficiency then why does it fail. It then takes a look at 5 reasons why employee empowerment fails such as managers pay lip service to empowerment but do not really believe in its power, they fail to provide easy access to the information and training to the staff to make decisions, they fail to establish boundaries for empowerment, have defined the decision making authority and boundaries with staff but then micromanage the work of employees and lastly the managers fail to appraise or appreciate the employees for their hard work.(“Five More Reasons Employee Empowerment Fails” by Susan M. Heathfield)

Robert Bacal (2004) basically answers to a question of a manager who is finding it hard to implement empowerment as the employees themselves are hesitant to take an initiative and in the answer to the query tells the manager that empowerment just does not mean treating the employee like a guest as the employees tend to get used to the traditional hierarchy of the firm and thus resist the opportunity(empowerment) and in order to empower employees in the real sense steps such as clearly defining what empowerment criteria you have set what you actually mean by it and clarifying the goals of the firm , effective routing of information in the firm, clear process for input of decision making, management consistency i.e. not necessarily blindly following each decision but over-ruling it with tactics so that the spirit of empowerment is not hurt and skill development that is providing the necessary tools to extract ones ability to benefit from it, and a stable and respectful workplace history which will give confidence to employees to work with confidence and no hesitance otherwise a bad track record will just suppress the ability to participate freely. (“Empowering Employees Can Yield Unexpected Conflict and Resistance!” By Robert Bacal published in 2004)

Peter Grazier (1998) discusses the benefits associated with the employee empowerment in his article that how it helps a company to reduce its expenses or costs occurring due to Absenteeism and turnover. The author further describes that due to employee empowerment, Absenteeism and turnover goes down, safety assurance and employee performance gets better and the company obtains other associated benefits as well. (Quantifying the “Soft” Costs of Empowering Employees by Peter Grazier Originally published in EI Network on April 1, 1998)

Susan M. Heathfield has defined employee empowerment in her article as the process of enabling or authorizing an individual to think, behaves, take action, and control work and decision making in autonomous ways. She has also discussed the main problem regarding employee empowerment that most organizations experience. They think that the manager bestows empowerment on the people who report to him rather than thinking that each employee should work in empowered ways. Lastly, the author argues that the organizations should create such environment that helps boost the ability of employees to act in empowered ways. (Employee empowerment by Susan M. Heathfield)

Theoretical framewor And hypothesis

The theme of this research is to shed the light on the empowerment as a core concept and a major factor in this study and to investigate the impact of some antecedent factors including (autonomy, creativity, level of communication between managers and employees, competency and self esteem) on the degree of employee empowerment and then to research the impact of empowerment on employee performance as illustrated in the following framework.

Identification of variables:

Dependant variable:

Performance of employees

Independent variables:

Employee empowerment

Autonomy

Creativity

Level of communication between managers and employees

Self esteem

Competency

Network of Associations

Positive relationship between autonomy and employee empowerment

Positive relationship between employee empowerment and performance

Positive relationship between creativity and employee empowerment.

Positive relationship between self esteem and employee empowerment

Positive relationship between “understanding between managers and employees” and employee empowerment

Positive relationship between competency of employees and employee empowerment.

Justification of relationships:

Employees having more autonomy are more empowered to make decisions. This shows that relationship between autonomy and empowerment is positive.

There is a positive relation between employee empowerment and performance. With the increase in empowerment, performance of employees will increase.

Creativity and empowerment has also a positive relation. If employees are more creative, they will do their work with more freedom and bring innovation to the work.

Positive relation exists between self esteem and empowerment of employees. If employees are having a high level of self confidence, they will definitely make right decisions.

If there is a good understanding between managers and employees, employees will feel more comfortable in doing work with them and it will effect the performance of employees in a positive way.

If employees are more competent or capable enough, they will exercise empowerment and will show high level of performance.

After developing a theoretical framework of above mentioned variables, we will develop hypothesis of each variable. We will then test these hypotheses to check whether these factors are the primary ones that influence employee empowerment and ultimately this leads to increased performance of employees.

Autonomy

Autonomy is defined as the state of independence one has to take decisions without the consent of others. Autonomy can play a major role to increase the job satisfaction of employees and they show more involvement in their work, thus creating a competitive edge for the firm. In our study we will focus at the autonomy of each individual within an organization and how it will lead to empowerment being exercised by the employees and to what extent it is effective in increasing their performance. White (1986) found that certain strategies that require high levels of control produce better results with low rather than with high autonomy. So, along with affecting people at their jobs, autonomy is also related to many variables crucial to organizational effectiveness (Brock 2003).

Empowerment and autonomy are not interchangeable but rather autonomy enhances the degree of empowerment among employees. It helps in lowering the turnover rate and level of absenteeism in an organization and promotes quality work.

Hypothesis:

H 1: The higher the level of autonomy given to service employees, the higher the level of empowerment they would exercise.

Creativity

As defined by the Webster dictionary “Creativity is marked by the ability or power to create to bring into existence, to invest with a new form, to produce through imaginative skill, to make or bring into existence something new”. It can also be defined as the ability to use different modes of thought to generate new and dynamic ideas and solutions (Carnevale, Gainer, and Meltzer). Creative thinking involves imagining familiar things in a new light, digging below the surface to find previously undetected patterns, and finding connections among unrelated phenomena (Roger von Oech).

Creativity and employee empowerment have complementary relationship. Employees should be empowered to take decisions and this leads to the opportunity of being creative. Creativity facilitates the employees to show the expressions of commitment, courage, to take decisions, more involvement in their jobs, risk taking and using their imagination for the success of the organization. Innovative employees show more productivity as compare to those who are happy in doing their boring routine work because creative people are curious, self confident, optimistic, flexible, visionary and have a good sense of humor .

Creativity and empowerment are believed to result from comparable organizational factors. For example, creativity is enhanced by freedom of information and relaxation of conditioned thinking. Empowerment results from open communication and network building, access to decision making and control of resources are empowering. Providing resources and support and encouraging the solution of unstructured problems enhance creativity. Low levels of supervision, participation in goal setting, and the establishment of challenging work goals foster creativity, while participation, expanded awareness, and being attuned to organizational goals empower individuals.

Hypothesis:

H 2: The higher the level of creativity shown by the employees, the higher the level of empowerment they will exercise.

Level of Communication between managers and employees

There is an often saying that “The only thing constant in the World is Change”. With the advancement in technology and rapidly changing environment, the methods of communication are also changing and the organizations are expecting more productivity from its employees due to increased efficiency and effectiveness of communication process within the firm. There is a definite relationship of communication between managers and employees with empowerment. More authority the manager gives to its employees, the higher the level of performance will be shown by them.

Open communication between managers and employees is essential and must be practiced in the organizations since it reduces stress and removes ambiguity. Open communication flatten your organization, reduces the hierarchal levels and decentralizes the authority which creates more empowered environment. Hence Empowerment in business means knowing how to “humanize” the work environment so management and employees work together to enhance productivity and achieve greater personal and professional success.

HYPOTHESIS:

H 3: The higher the level of communication between managers and employees, the higher the level of empowerment they would exercise.

Self esteem

Self esteem is defined as the opinion you have about your self or how much confident you are about yourself. Some employees may have low

self esteem and some may have high self esteem. Employees with high self esteem tend to show more positive response towards their work and environment and this confidence motivates them to takes decisions on their own. Since they believe in their self, this results in more productivity or output. This effects the organization as whole and leads to success. Negative thoughts about one self can be demotivating and one can easily give up or loose hope. They start depending on others and are not able to decide on their own.

In a CNN interview, Robert Wagner on Larry King 2002 was asked the following question:

“What is the most important thing for a person starting out on the road to success?”

“I would tell them the most important thing is to work on your self esteem, that’s the best advice I can give”

An empowered company begins with self-empowerment. Owners and managers cannot empower others to perform their best until they are empowered themselves. Empowered management begins by hiring leaders who possess healthy self-esteem, superior people skills, and the willingness to share expertise to bring out the best in employees. Promoting and maintaining consistently high self-esteem in managers and employees is a vital ingredient to a highly empowered workforce. High self-esteem within the company is achieved by encouraging creativity, individuality, problem solving, and an open and honest exchange of ideas among all the employees in a non-threatening environment. The opposite of an empowered workforce is one composed of negativity, low morale, and a distrust of management. An unempowered workforce is an unproductive workforce.

Managers and workers have the basic need to feel they are contributing and making a difference. Employees who consistently feel enthusiastic about what they are doing, do a good job. In our study, we will be looking at the relationship of self-esteem and empowerment and how it promotes an employee to work in a decentralized organization causing employees to be empowered in many ways.

Hypothesis:

H 4: The high level of self esteem in employees, the higher the level of empowerment they will practice.

Competency

Competency means an individual’s conviction or confidence in his or her ability or effectiveness in accomplishing the performance requirements of a task. To delegate the employees, the managers must provide them with the necessary knowledge, enhance their skills and try to make them feel competent.

A Competent person seeks opportunities to increase personal contribution and level of responsibility; Supports and respects the individuality of others and recognizes the benefits of diversity of ideas and approaches; Delegates and empowers others to increase contribution and level of responsibility; Facilitates team goal setting and problem solving; Recognizes differences between individuals, cultures and teams and provides developmental feedback in accordance with performance management principles; Identifies competencies required and suitable resources for specific tasks; Displays personal interest in the well-being of colleagues; Able to manage own time as well as time of colleagues and other stakeholders; and Manages conflict through a participatory approach.

In the different researches and studies of employee empowerment, such as one carried out by Erickson et al, revealed that employee empowerment is said to occur when the management and employers pursue goals of both personal as well as professional growth for their employees. For example the senior managers and leaders within the organizations can assist their employees in enhancing their capabilities, in turn enhancing their potential to fully utilize their capabilities.

Hypothesis:

H 5: The level of Empowerment will be high for those employees who have the capability or the necessary skill or knowledge to take decisions.

Now that we had clarified how each of the previous variables (Autonomy, Creativity , Level of Communication between managers and employees, self-esteem and competency) affects and contributes to the adaptation of an empowerment culture, the following section is dedicated to verifying the relation between employee empowerment and the job performance concepts.

Performance

“Simple,” some people say. “Performance is getting the job done. Producing the result that you aimed at, nothing else matters. There are no prizes for coming second.” [reference]

Performance is basically the level of output shown by an employee. The level of performance (high or low) varies from person to person. Some employees may produce good results and some may show poor performance. Managers consistently check the performance of employees to ensure that goals are consistently being met in an effective and efficient manner. There is a deep connection between employee performance and employee empowerment which is based on two things. The first main thing is the goal setting. If the employee understands his job or work well and know how it will effect the organization, he will take those decisions that will benefit the company for long-term.

Second, empowerment implies accountability, along with the freedom to make decisions. It helps to create that accountability for results and the outcomes of decisions the employee makes through ongoing communication, and of course, the performance review process.

Intellectual capital of a staff can be distinctive competence of a company. Firms that motivate their employees to make creative decisions and being open to experience (always ready to take risks) are more likely to achieve success. The most efficient and effective way to increase the performance of employees is to empower them as it gives authority to workers to make prospective decisions. This delegation of authority increases job satisfaction and sense of responsibility (Marshall, Talbott & Bukovinsky 2006)

Empowerment is the most important practice which has a greater effect on the performance of employees in an organization. Progressive & Productive firms are profitable, effective, adaptive and proactive towards changing environment