The Reality and Rhetoric of Empowerment - Literature review Example

A Critical Analysis of the Reality and Rhetoric of Empowerment Introduction Employee empowerment is certainly not a new idea since more than a decade ago, Beard (1993) had become jaded enough with the concept to say that empowerment is one of the concepts which some people take as a fad, others as the answer to all their problems and yet others who say that it is something which they have been doing for years. However, he did suggest that there may be something more meaningful behind the idea of empowerment since engaging workers is known to make them happy but even more important than that is the idea of remaining competitive. Beard (1993) focused on the idea of empowerment with the viewpoints of the need to remain competitive by removing many middle managers to allow employees to make some decisions. At the same time, there are other ideas which support the concept such as the process of Total Quality Management, the concept of employee retention/satisfaction as well as reward management and increased motivation or the culture of the company. However, as described by Heathfield (2007), Welch (2005), Hornstein (2002) as well Heller (2007) the reality of empowerment is quite different. The reasons for that are manifold and the most important reason which becomes evident from the literature is the lack of trust which develops between managers and employees as there can be communication gaps in terms of what employees are empowered to do and what they can not do. However, this is only a part of the full equation which includes several other factors. At the present time, there is certainly a significant difference and a wide gap about what managers would say about empowerment and what actually takes place in the business world (Heller, 2007). Most of the time, this gap does not come from differences in what manager say and then do but this gap comes from the policies and practices which make empowerment a failure rather than a success (Heathfield, 2007). The Gap Heller (2007) points towards an interesting comparison when he reports a study which shows that half of all mangers are looking to make plans which can empower their employees. However he also mentions that their understanding of the term may be significantly different from the one which is accepted by management gurus. He goes on to say, “Such statistics are not as encouraging as they seem. Clearly, well over half the companies concerned had not yet introduced whatever they meant by ‘empowerment’ (Heller, 2007, Pg. 1)”. Additionally, it seems that the real power is retained by the managers in question while some elementary powers are delegated elsewhere. A good example of this comes from the GE Quick Thanks program in which employees are permitted to reward each other for good performance. Kerr (1996) gives an inside view of what happens at GE where a program called “Quick Thanks!” is in place. This system allows employees to nominate other employees (even across departments) with a $25 gift certificate for certain stores and restaurants in appreciation of their work. In 1995, ten thousand such certificates were handed out by GE employees to their peers. Even though it may seem like a huge number, the rewards are only given for exemplary performance and the peers are not free with their recognition. They often have stricter personal criteria for giving these certificates and the receiver often gets the award in person from the individual who nominated them (Kerr, 1996). However, the real power to reward others is retained by top management at the company. A bonus is a lump sum payment which is significant enough for an employee to motivate him/her. Clearly a twenty-five dollar bonus would do little to motivate an employee who makes $100,000 per annum but a $20,000 bonus would be certainly useful. None of the sources given declare the exact amount of bonuses per salary bracket at GE but Grote (2002) says that the useable figures for realistic and motivating bonuses are between 9-12% of the person’s yearly income. This is a significant amount and GE retains this power with the mangers and does not empower employees to make decisions in this matter. No one complains about the reward system at GE and in fact, it actually received high praise from several different parties. It is to GE’s credit that their differentiation system for reward management has been respected, tested and accepted by some of the biggest names in the world. Their ranking system for bonuses etc is used by Microsoft, Cisco, HP, Sun, Capital One, PepsiCo and Intel amongst many others. Sun exactly mirrors GE’s system to discriminate between employees. On average a quarter of all the companies in the Fortune 500 list have established this practice of division as a reward management standard (Colvin, 2006). It does seem extraordinary that employees are being asked to reward others with gift certificates while managers can give out bonuses which really matter in the greater scheme of things. Empowerment therefore, does not seem to be on the priority list for GE even though it was considered the best company in the world by Fortune magazine (Demos, 2006). Despite this rather bleak example, it seems that there is still hope in terms of the rhetoric and the reality of empowerment especially if we look at some of the smaller companies in the world. The Union Small companies seem to be the shining beacon for the union between employee empowerment and reality since it is the culture of empowerment which comes most easily to young agile companies rather than old bureaucratic systems. Burlingham (2003) argues that the culture of a company can go a long way towards making the company act like a small business that empowers its employees or act like a large bureaucratic organization. Welch (2005) also recommends that company which wishes to empower individuals should not have a bureaucratic system because it leads to inefficiencies when it comes to decision making and the empowerment of employees. This process is explained by Burlingham (2003) who gives a detailed review of the culture at Zingerman’s Community of Businesses which includes everything from the hippie sandals and casual clothes worn by the CEO to the financial figures of the company showing a huge margin of profits and more than fifteen million dollars in total sales. Keeping the financial information aside (since the company is doing very well as a small business) the focus is on the culture of the company which has built a strong sense of belonging and ownership for the employees, a trust relationship with the owners, excellent management practices and a zeal to provide customers with the best possible service. Such a culture only comes with complex relationships that evolve with time between the customers and the company as well as between the owners and the employees (Burlingham, 2003). Allowing Empowerment Throughout the history of the company, it was able to adapt and change to the business requirements simply because it had an entrepreneurial culture that respected the ideas presented by the employees and even leading them to form their own companies under the same umbrella. The company appreciated change and flexibility and while such situations can be difficult to create, there is no reason why an old fashioned organisation could not develop the same work and social environment in which belonging and ownership are a part of the regular work ethic (Burlingham, 2003). As a part of its overall business model, Zingerman encourages entrepreneurs to come and work for the company with their ideas so they can be invested in and eventually turned into new companies which continue to have relationships with Zingerman. Any employee who has an idea for a product can start selling it as their own project, manage it, develop it and if it takes off, they can turn it into a profitable venture together (Burlingham, 2003). This is how one small company manages to empower employees and keep its promises with the entrepreneurs who work for it. This also keeps the company fresh and young since it is constantly increasing in size with the inflow of new ideas created by the brightest entrepreneurs who are lured to work for Zingerman’s Community of Businesses. Not only the employees, but the community is also happy with the company since 10% of their operating profits always go to charitable causes within the community (Burlingham, 2003). It simply goes to show that keeping the culture and the organisational advantage of ‘small businesses’ will help a company even though it may employ hundreds of people and have a huge budget to deal with. In effect it is the complicated process of business thinking which needs to be changed to be more inline with the concept of employee empowerment rather than to seek changes with the company itself. This strikes at the very heart of the problem since most managers do no understand what empowerment is all about. Heathfield (2007) suggests that the problem is one of understanding when she says: “Managers don’t really understand what empowerment means. They have a vague notion that employee empowerment means you start a few teams that address workplace employee morale or safety. You ask people what they think about something at a meeting. Wrong. Employee empowerment is a philosophy or strategy that enables people to make decisions about their job (Heathfield, 2007, Pg. 1).” The change for the thinking of managers who currently hold positions which are not letting employee empowerment may not come simply by telling them about empowerment. Such changes may need to come when the management of the company itself changes or when new companies takeover old organisations simply because they are more competitive with the idea of employee empowerment. It may mean that the old methods of doing business and dealing with employees are on their way out, but if such things lead to an overall improvement in the system they should not be stopped. Conclusion Such events will cause empowerment to come naturally to the employees of a company and if the firm resists the idea of empowerment it will simply cease to expand beyond a certain point. In today’s world, a company can have its head office in London, the main production facility in China, the research laboratories in Germany and the support centre in Pakistan. At the same time, the individuals working for the company in different locations are likely to come from different cultures, have different logistical needs and they may even require different management policies (Hollinshead and Leat, 1995). Without empowerment and some level of delegations for decisions, a small group of individuals who keep management control would simply find it impossible to govern a globally expanding enterprise. While it may seem complicated, these elements are just some of the basic concerns of creating a truly empowered set of employees. However, it must be noted that the functioning of the company may be much simpler if employees are not randomly empowered but selectively given powers as a relationship of trust develops with the company. It is unlikely at a person who has been with the company at the bottom rung for less than three months would be permitted to decide what sort of bonuses should be given to his/her boss or what new mission critical investments are to be made by the company. However, a company which does start to groom such an individual at three months could have a very astute and powerful executive working for them in less than three years. Works Cited Beard, L. 1993, ‘The empowerment thing’, [Online] Available at: http://www.findarticles.com/p/articles/mi_m3101/is_n2_v66/ai_14335459 Burlingham, B. 2003, ‘The Coolest Small Company in America’, Inc,. vol. 25, no. 1, p. 64-72. Colvin, G. 2006, ‘What Makes GE Great?’, Fortune. vol. 153, no. 4, pp. 90-96. Demos, T. 2006, ‘The World’s Most Admired Companies’, Fortune. vol. 153, no. 4, pp. 72. Heathfield. H. 2007, ‘Top Ten Ways to Make Employee Empowerment Fail’, [Online] Available at: http://humanresources.about.com/od/involvementteams/a/empowerment.htm Heller, T. 2007, ‘Employee Empowerment: Management giving power to the people’, [Online] Available at: http://www.thinkingmanagers.com/management/employee-empowerment.php Hollinshead, G and Leat, M. 1995, Human Resource Management: An international and comparative perspective, FT Pitman Publishing. Hornstein, H. 2002, ‘The Message to Your Employees: Alienation or Empowerment?’, [Online] Available at: http://www.phptr.com/articles/article.asp?p=30033&rl=1 Kerr, S. 1996, ‘Risky business: The new pay game’, Fortune. vol. 134, no. 2, pp. 94-97. Welch, J. 2005, Winning, HarperCollins. Word Count: 2,070 Read More