Performance Management: Employee Empowerment - Coursework Example

Introduction Employee empowerment is the creation of an environment in the organization where employees are given the ity and encouragement to make decisions independently so that they have control over the result of their decisions and take full responsibility of the consequences (Heathfield 2006). Employee empowerment is a way to motivate them so that they have greater commitment towards their job thereby benefiting the organization. According to Dymock and McCarthy (2006), empowerment is a slow process requiring a lot of training both for the managers and the employees. It’s a cultural change that the organization experiences. Though there are several problems that are faced with empowerment like the attitude and insecurities of the managers, high cost of conducting the required trainings, making the employees understanding the importance of empowerment etc. can be overcome (Judge and Bono 2000, p. 751-765). Lots of firms favor empowerment as it offers advantages like employee confidence, quicker resolution of problems, employee satisfaction, motivated employees and ultimately efficiency and financial benefit for the organizations. These benefits outweigh the problems and empowerment is increasingly being adopted by organizations (Honold 1997, p. 202-212). Need for a win-win situation Empowerment can be beneficial for the firm if both the employees and employers are content and there is a win-win situation. Employers can only be pleased with the reform if they see an improvement in the employee’s performance due to empowerment and there is no threat to their position in the firm when they relinquish their control due to empowerment. (Dymock and McCarthy 2006, p.525-530). When the employee performance enhances, the firm can achieve its goals and this in turn is a winning situation for the employer as the organization has increased profits when it meets its objectives. If empowerment benefits just the employees leaving the employers dissatisfied, which may be due to underperformance of employees, lack of coordination between the employee and the employer etc. it will not benefit the firm. When the management is not content and has problems with empowerment of the employees, the culture will not be sustainable for long. According to Judge and Bono (2000), there will be lack of coordination between the employees and the employers and they will not be able to work harmoniously. This would also mean that the firm will not benefit from empowerment as the employees will not be able to perform their best and at the same time there will be discord amongst the employers leading to mismanagement. Thus empowerment should benefit not just the employees but also the employers resulting in a win-win situation. This can be achieved when even the last possible level of employees has power and confidence and becomes more effective at his work and is given confidence by giving him importance, a sense of competence, independence and a sense of impact of their contributions (Mishra and Morrisey 1990, pp.443-461). This encouragement can only be given to them by their managers or employers. For that to happen, the employers also have to be trained so that they can understand the importance of empowerment and they can enable better implementation of empowerment. The organizations should conduct researches on the employees assess their performance before and after their empowerment. When they see the performance graph of the employees go up, they will encourage empowerment and help in establishing it in the firm. If there is no positive change in the performance, the employers will seriously consider reverting back to the old style of management where they were more in control. Thus for empowerment to be truly beneficial, both the employees and the employers have to be satisfied (Honold 1997, p. 205-210). Bowen & Lawler (1995) refer to a research done by The Center for Effective Organizations at the University of Southern California on the impact of empowerment on employees and employers and its results. In about two-thirds of the companies in the research showed that more participation by the employees resulted in better quality, productivity, service and an improvement in work life. The employers were coaching, sharing information and giving direction to the employees and were receptive to empowerment. Both the employees and the employers were happy with the change and it resulted in increased profit for the firm. The remaining one third of the companies had employers who were not willing to share decision making powers with the employees as it was difficult for them to accept the change. The result was that the employees were dissatisfied in their jobs and were not performing at their best even when they were empowered. This finding verifies how important it is for both the employees and the employer to be satisfied so that empowerment can be truly employed and the firm can have financial gains. Both the managers and the employees play an equal part when empowerment takes place (Bowen and Lawler 1995, p. 74-83). It is good to have a win-win situation as the firm has to keep in consideration all of its employees including managers. According to Dymock and McCarthy (2006), the managers have to be satisfied to so that they can perform at their best and the overall performance of the firm improves. The employees and the employers of the firm work as teams. Thus it is important that all the members are happy with the changing culture of the organization so that they may give the best results. If either of them is unhappy, empowerment cannot be implemented completely which means that the firm will not reap its benefits completely (Ford 2006, p.518-524). Benefits of empowerment Several researches have proved that empowerment of employees in the realms of decision making and giving them more authority to take risks to resolve issues develop a stronger bond between the employee and his job. He is more dedicated and takes greater interest in his work (Judge and Bono 2000, p. 760-765). Empowerment enables him to take better decisions as he is more knowledgeable about the long term consequences and the current scenario of the firm. Thus he takes calculated and knowledgeable decisions which increase his chances of making the right decisions. He thus takes more interest and is more involved with the outcome. This gives him a greater degree of job satisfaction. According to Stark (2003), working within teams, communication trainings, profit sharing, job enrichment, skill-based wages etc. are practices that have a positive effect on the employees and empowerment gives the employees all of these. Thus empowerment affects the employees positively. With empowerment employees get motivated as they feel more in control. They can make decisions, they know more about the company, and they are more knowledgeable. Things that they previously did not know about the company are shared with them (Marshall). They begin to feel that the company trusts them and is more confident about their work. Their relation with the firm becomes stronger and they work with more dedication and commitment. This is because they now feel more responsible for their actions as they begin to care more about what happens to the firm as now they are being trusted more and they do not want to let the organization down. They feel that the organization is giving them a lot in terms of bonuses, appreciation, authority, control, trust and respect and in return they try their utmost by giving their best to the firm and by being committed (Stark 2003 p.10-18). When employees are given the power of decision making, actions are taken more swiftly and a lot of time is saved. If an employee has to wait for the approval of a senior, the employee has a feeling of helplessness and dependency on the senior (Heathfield 2006). Organizations can suffer major losses when employees have to depend on others for simple decision making and approvals. Customers waiting long in line to be served in a restaurant that has run out of supplies will be dissatisfied and offended when the employees tell them that we are out of stock and cannot order for more as our manager is not here (Dymock and McCarthy 2006, p.525-535). This will only produce angry customers and a bad reputation of the organization. As researched by Bowen and Lawler (1995) empowerment also enables employees to give faster on-line responses, they are much faster in resolving issues, take greater interest in the needs of the customer and try satisfying customers in the best possible way. Empowerment gives them a sense of ownership and instills dedication in them. Since they experience their management taking care of them, they in turn respond better to customers and perform better and are much more polite to the customers. A positive interaction with the customers results in customer satisfaction and a positive feedback for the firm. This in turn generates more business for the organization as existing customers become loyal and new customers get attracted to the services of the firm. Thus employee empowerment results in customer satisfaction, word of mouth advertising, quicker resolution of issues, satisfied employees, healthier customer-employee relations and thus better business for the firm (Stark 2003 p.10-118). It is very essential for employees to be able to trust their organizations. Organizational trust develops when the relationship between the employees and the management is straight forward and that the employee believes that the management will stand by their commitment. The employees know that the organization will not misuse them and is providing them a healthy and competitive environment (Honold 1997, p. 202-212). Ford (2006) argues that empowering employees by sharing important information, sharing the firm’s goals and objectives, involving them in decision making and enhancing communication initiate trust in organizations and increase open communication, sharing of critical information, and greater worker decisional involvement foster trust in organizations and increase the employee’s efficiency. As this trust develops, the employees have more job satisfaction and loyalty to their firms (Ford 2006, p.495-524). As the research of Marshall indicates, when there is empowerment in the organization, there is more interaction and openness between employees. They contribute more ideas and suggestions. This leads to better idea generations and a better solution to problems. A manager will not hesitate to ask his juniors for suggestions nor would an employee feel awkward giving ideas to his seniors. Thus empowerment enables employees to generate better options and thus this benefits the firm as the firm has more options and better ideas to work with. This also engenders a feeling of belonging and closeness in the employees when their ideas and opinions are valued and heard. They feel elated when their suggestions are implemented. This stimulates more ideas and breaks the hesitations they have. They can relate better with their seniors and colleagues and are able to make more contributions to the firm (Stark 2003 p.10-118). According to Honold (1997), empowerment instills organizational commitment and job satisfaction and enables workers to handle stress. When the employees are committed and are satisfied in their job, they are more resistant to stress and are able to handle challenges at work especially organizational issues. A study conducted by Mishra and Morrisey (1990) on nurses revealed that those nurses that were empowered with autonomy, decision making authority, communication with subordinates etc. showed a higher level of job satisfaction and were much more resistant to strain and job burnouts. This is because they trust the organization and know that their organization will not misuse or overwork them. If they are faced with a stressful situation, they work with more dedication and to the best of their ability and do not blame the management or the organization if they undergo a stressful situation. They fair better in a situation that is stressful than employees who are not empowered. Firms where employees are empowered will have their loyalty and turnover will decrease. When the employees feel they are important and have a crucial role in the firm, they feel responsible and develop an attachment with the firm (Marshall). There will be a greater chance of the employees to not switch their job for a better salary. If they have job satisfaction, they are likely to work even at a lower pay scale. Firms that do not empower their employees have to attract prospective employees by offering them higher wages. They may not be able to attract the best of employees as the loyal ones would not be switching. Thus without empowerment, a firm has to spend more on wages to give some sort of satisfaction to the employees which may not be enough to retain them and enable them to perform their best (Ford 2006, p.495-524). . Problems of empowerment However, introducing a culture of empowerment in an organization is not an easy task. Many firms have invested large sums in order to bring about this culture in the organization but have failed. Others have not been able to implement it to its fullest and thus were not able to reap its benefits. According to Marshall, management plays a vital role in enabling the firm to be empowered. Problems may arise when the management feels threatened and hesitant to share authority and letting the employees participate in decision making. It is threatening for some employees to give up their control when they have worked hard all their life to attain this level of control. The managers find it difficult to go through the transition from the hierarchical chain of command and leadership to a flatter structure with shared control. Also, the higher management doesn’t want to share power with employees they have always looked down upon. As researched by Mishra and Morrisey (1990), management may also object to the fact that some employees may not be capable enough to make the right decisions and thus by empowering them, authority may go in incapable hands. One way to handle this situation is to provide the employees with vigorous training so that they are equipped with the decision making skills. Management then has to be convinced that these employees are capable enough for the responsibility. This capability of the employees may be monitored by first involving them in small scale decision making and noting how well they handle the situation. Based on this, they may then be given more crucial decision making situations (Mishra and Morrisey 1990, pp.443-450). According to Bowen and Lawler (1995), firms face problems with empowerment when they have to deal with such attitudes of the managers. It is easier to train the employees and equip them with decision making skills. More difficult however is to change the thinking and attitude of the senior managers who have to now see things from a different perspective. They had worked all their lives for the authority and the control they have now. What the organization has to make these managers see is that by sharing the decision making powers they are not losing authority as they will be the ones answerable for the results. Instead of feeling threatened by the employees they should consider them as their team and give them confidence to make valuable input. Thus changing the mindsets of the managers becomes a bigger task when trying to establish organizational empowerment. A solution to this problem is that the managers should also be given training. This training should teach them how to handle such situations and how to fit into a role of a mentor or coach so that they are able to adjust to the changing culture and are able to assist the employees in attaining empowerment so that they have a sense of belonging when they are working together (Bowen and Lawler 1995, p. 74-83). The selections and trainings required for empowerment are expensive and need a lot of investment. Also, the labor cost of the empowered employees is higher which adds to the cost (Heathfield 2006). Besides, there are chances of bad decision making by employees. Empowerment might lead to the employee being over confident and therefore might misjudge the whole situation leading to making bad decisions. Proper training may rule out some of these possibilities but not all (Heathfield 2006). As researched by Dymock and McCarthy (2006), managers have to set goals for employees and have to give them direction. When employees make a bad decision or when things go wrong, the managers publicly blame the employee which discourages the employee and he would hesitate to make a decision the next time. Instead, the manager should have stood behind the employee and supported him, guiding him through. Even if he did make a mistake the manager should support him. This would not make the employee feel deserted. Similarly, when an employee is successful or makes a good decision because of his empowerment, he needs to be appreciated and encouraged. Failure to do so will discourage them and they will not feel motivated and confident of their decisions and ability to handle situations in the future (Dymock and McCarthy 2006, p.525-537). There are instances where employees also don’t favor empowerment. Some employees don’t want more responsibility than they already have (Marshall). This may be because these employees may not be satisfied in their current jobs and are not motivated enough. They do not understand the contribution they make to the organization as a whole and fail to understand how additional responsibility could help them. This situation may be improved when the employee is educated about the benefits he will reap form empowerment (Heathfield 2006). . With empowerment, the organization has to ensure that the job that the employee is given matches his capabilities. The employee should not feel overworked. There should be appropriate compensation and bonuses etc. so that he feels that his work and his salary are justified (Bowen and Lawler 1995, p.73-80).When employees feel underpaid and over worked, they are de-motivated to work. This balance is very essential when empowering employees and for the empowerment culture to sustain. Failing to do that will disappoint the employees and de-motivate them instead of boosting them (Bowen and Lawler 1995, p. 74-83). Conclusion Empowering employees is a way to motivate employees by giving them more control. This control is given to them by giving them more decision making powers, information is shared with them and they are more knowledgeable about the organizational goals and objectives (Heathfield 2006). This builds trust and the employees feel respected. The managers have to help the employees be empowered and act as mentors and guiders sharing control and supporting them instead of being threatened by them. The overall effects of empowerment if implemented completely at every level are benefiting for the company as the employees are satisfied and loyal and thus work with increased efficiency. This increases the customer satisfaction and ultimately an increase in customers resulting in profit for the firm (Mishra and Morrisey 1990, pp.443-445). However, if the empowerment is not implemented properly, the efforts may be ineffective and all the monetary investment and training efforts would be useless if the employees or managers do not accept this cultural change (Marshall). For this to happen the managers and the employees have to know its importance and how this empowerment would benefit them. All their insecurities about this changing work environment have to be removed before they can truly trust their organization and really feel empowered. It is a very difficult task for the managers to break away from the traditional form of management and follow this new approach (Honold 1997, p. 202-212). However, once they understand the importance of empowerment, they will adopt themselves. There are some problems that the organizations will have to face when using empowerment as a way to improve the performance of employees; nevertheless the advantages of such a culture are far more. The overall effect of empowerment would be beneficial for the organization as a whole. References Bowen, D and Lawler, E 1995, ‘Empowering Service Employees’, Sloan Management Review, vol. 36 no. 4, pp.73-84. Dymock, D and McCarthy, C 2006, ‘Towards a learning organization? Employee perceptions’, The Learning Organization, vol.13 no.5, pp. 525-537. Ford, R. (2006) ‘Organizational learning, change & power: Toward a practice-theory framework’, The Learning Organization, vol.13 no.5, 495-524. Heathfield, S 2006, ‘Employee empowerment’, Human Resources: About, Inc. Viewed, 22 September 2007 available: http://humanresources.about.com/od/glossarye/a/empowerment_def.htm Honold, L (1997) ‘A review of the literature on employee empowerment’, Empowerment in Organizations, vol. 5 no.4, p. 202-212. Judge, T. A. and Bono, J. E (2000) ‘Five-factor model of personality and transformational leadership’, Journal of Applied Psychology, vol. 85 no.5,pp. 751-765. Marshall, J ‘Empowerment at Work’, viewed 21 September 2007, available: http://www.mhmail.com/articles/empowerment-process.html Mishra, J and Morrisey M.A 1990 ‘Trust in employee/employer relationships: A survey of West Michigan managers’, Public Personnel Management, vol.19 no.4, pp. 443-461. Stark, Peter B (2003) ‘How to Involve Others in Decision Making; Trust is the Key’, The Receivables Report, p10-18. Read More