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 Others Stock Option Immaterial Legal Co- Determination Voluntary Participation Types of Employee Participation

Immaterial Participation Legal Co- Determination At Board LevelCommittees Voluntary Participation Indirect participation Like Round Table Discussions Direct participation (Goal Setting, Delegation, Circle work, Suggestion Scheme, Employee Survey, semi autonomous workgroups)

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 … ElementTraditional Org.Empowered Org. Organization StructureLayeredFlat / team Job DesignNarrow, Single taskWhole Process / Multiple Task Management RoleDirect / ControlCoach / Facilitates LeadershipTop downShared with Team Information FlowControlled / limitedOpen /Shared RewardsIndividual / SeniorityTeam / Skill Based Job ProcessManagers 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 Rewards Power Information Knowledge Competence Choice Meaning Employee Empowerment Employee Involvement Employee Satisfaction

Employee Empowerment Employee Involvement Employee Satisfaction Power Quality Circles, Job enrichment, self managed team. Information Customer feedback, Unit performance data, Competence Data Knowledge Skills to analyze business strategy, Important process skills. Rewards Pay tied up with service quality, Individual and Group pay system

Rewards Mgmt. Support Team Involvement Employee Empowerment r =.47 Employee Involvement Training r=.41 r =.40 r =.46 P <.001 (Cotton, 1993)

Power Rewards Employee Involvement Employee Satisfaction r =.721 r =.812 Employee Empowerment Information r=.593 r =.698 r =.572 P <.01 (Joel N Light, 2004) Ph.D. Dissertation Knowledge r=.769