MGT 674

Employee Relations Management

Ajaya Mishra

Employee Relations

Session 7

Employee Empowerment …

Employee Empowerment Defined…

• Employee involvement appears to be a strong enabler of Employee Empowerment. (Bowen & Lawler, 1995; Spreitzer, 1995)

• It could also be defined as controlled transfer of authority to make decisions and take actions.

• Empowerment: Giving Power to Employees – The freedom and the ability of employees to

make decisions and commitments.

Employee Involvement …

• Describes the prescription of an employee regarding his identity or importance in the group work. (Bandura, 1982)

• Is often considered process oriented, although it can be a motivational system. (Leonard & Schooll, 1995)

• It consists of four separate process knowledge, information, power and rewards. (Lawl, 1986; Scarselletha, 1999)

Participation …• … ‘a process of employee involvement designed to

provide employees with the opportunity to influence and where appropriate, take part in decision making on matters which affect them’.

• Employee participation is a pluralist/collective approach with a continuum from ‘no involvement’ to ‘employee control’ (Blyton & Turnbull, 1998). Employee involvement, in contrast, is more individualistic and unitarist. It aims to harness commitment to organizational objectives and relies on the maintenance of management control.

Forms of Employee Participation

• Employee Participation comprises material and immaterial participation.

• Material participation includes all financial (monetary) participation of employees in the company (Schaschl, 2000) such as a participation in the organization’s capital, profit or gain or in others forms, e.g. stock options (Backes-Gellner, Kay, Schröer & Wolf, 2002).

• Immaterial participation has employees involved in information, coordination, and decision processes within the company (Scholand, 2001; Schaschl, 2000; Backes-Gellner et al., 2002).

Employee Participation

Material

Share Ownership Profit Sharing

OthersStock Option

Immaterial

Legal Co-Determination

Voluntary Participation

Types of Employee Participation

Differences in Key Terms …

• The major differences between involvement, participation and empowerment is related to the transfer of decision making authority. Whereas in both, involvement and participation, management retains control, in empowerment employee have at least some degree of authority to make and implement their own decision. (Psoins & Smithson, 2002)

• What is needed?– Successful implementation of empowerment

requires change in corporate culture.

• Empowerment involves actively soliciting input from those closest to the work and giving careful thought to that input.

Types of Empowerment …

• Psychological Empowerment– A process of enhancing feelings of self efficacy

among organizational member through the identification of conditions that foster powerlessness and their removal .. (Cogner & Kanningo, 1988)

• Structural Empowerment – Defined as a particular set of strategies and

practices to shape the workplace by managers of the organization. (Eylon & Bamberser, 2000)

Rationale for Empowerment …

• An aspect of Working Smart

• Empowerment is the key to motivation & Productivity.

• It enables a person to develop personally & professionally.

Key differences between traditional and empowered organization …

Element Traditional Org. Empowered Org.Organization Structure Layered Flat / team

Job Design Narrow, Single task Whole Process / Multiple Task

Management Role Direct / Control Coach / Facilitates

Leadership Top down Shared with Team

Information Flow Controlled / limited Open /Shared

Rewards Individual / Seniority Team / Skill Based

Job Process Managers Plan, Control and Improve

Teams Plan, Control and Improve

Inhibitors of Empowerment• Resistance from Employees & Unions• Resistance from Management

– Insecurity– Personal Values– Ego– Management Training– Personality Characteristics of Managers– Exclusion of Managers

• Workforce Readiness• Organizational Structure & Management Practices

Degrees of Empowerment

• Job content– Tasks and procedures necessary for carrying out a

particular job.

• Job context– Reason for the job and the setting in which it is

done.• Includes organization’s structure, culture, and reward

systems.

Characteristics of Empowered People

• Sense of self-determination – Employees are free to choose how to do their work; they are not

micromanaged.

• Sense of meaning – Employees feel that their work is important to them; they care about

what they are doing.

• Sense of competence – Employees are confident about their ability to do their work well; they

know they can perform.

• Sense of impact – Employees believe they can have influence on their work unit; others

listen to their ideas.

More or less stress

• What are the effects of empowerment on stress?

• What are the effects of empowerment on performance?

• What are the effects of empowerment on job satisfaction?

Stages of Empowerment

• No Discretion– The employee is assigned the task, given no

discretion, and most likely monitored by a supervisor.

• Typical assembly-line job—highly routine and repetitive.

• Can lead to lowered satisfaction and productivity.

Stages of Empowerment

• Participatory Empowerment– Autonomous work groups that are given some

decision-making authority over both job content and job context.

• Some evidence of higher job satisfaction and productivity in such groups.

Stages of Empowerment

• Self-Management – Employees have total decision-making power for

both job content and job context.• Generally reserved for those in top management,

although it is also sometimes granted to high-level salespeople.

• Very rewarding to those who hold it.

Conditions for True Empowerment

• There must be a clear definition of the values and mission of the company.

• Company must help employees acquire the relevant skills.

• Employees need to be supported in their decision making, and not criticized when they try to do something extraordinary.

• Employees need to be recognized for their efforts.

Management’s Role in Empowerment & Implementing Empowerment

• Management’s Role:– Commitment– Leadership– Facilitation

• Implementing Empowerment:– Development of Suggestion Systems (Fig 8.3)– Considering the Employees Point of View– Putting Vehicles in Place

• Brainstorming• Nominal Group Technique (fig 8.4)• Quality Circles• Suggestion Boxes• Walking & Talking

• Management’s Role:– Establishing Policy– Setting Up the System– Promoting the Suggestion System– Evaluating & Implementing suggestions– Rewarding employees

• Improving the system..– Improving Suggestion Processing– Improving Individual Suggestions

• Problem Identification• Research• Idea Development

• Evaluating Suggestions– Though Employees make suggestions, final analysis is

still to be made by manager.– Thus, Establish a formal rating system for evaluating

suggestion systems.

• Handling Poor Suggestions– Listen Carefully– Express Appreciation– Carefully explain your position– Encourage feedback– Look for Compromise

Achieving Full Participation• Removing Hidden Barriers

– Negative Behavior– Poor Writing Skills– Fear of Rejection– Inconvenience

• Encouraging new Employees• Coaching Reluctant Employees

– Assess– Investigate– Match– Choose– Manage

How to Recognize Empowered Employees

• Taking Initiative

• Identifying Opportunities

• Thinking Critically

• Building Consensus

Some Research Findings and Models of Employee Empowerment

Impact

RewardsPower

Information

Knowledge

Competence

Choice Meaning

Employee Empowerment

Employee Involvement

Employee Satisfaction

Employee Empowerment

Employee Involvement

Employee Satisfaction

PowerQuality Circles, Job enrichment, self managed team.

InformationCustomer feedback, Unit performance data, Competence Data

KnowledgeSkills to analyze business strategy, Important process skills.

RewardsPay tied up with service quality, Individual and Group pay system

Rewards

Mgmt. SupportTeam

Involvement

Employee Empowerment

r = .47 Employee

Involvement

Trainingr= .41

r = .40

r = .46

P < .001

(Cotton, 1993)

Power

RewardsEmployee

Involvement

Employee Satisfaction

r = .721r = .812 Employee

Empowerment

Informationr= .593

r = .698

r = .572

P < .01

(Joel N Light, 2004)Ph.D. Dissertation

Knowledge

r= .769