What is an empowerment culture?
Employee empowerment is a management practice of sharing information, rewards, and power with employees so that they can take initiative and make decisions to solve problems and improve service and performance.
Empowerment is based on the idea that giving employees skills, resources, authority, opportunity, motivation, as well holding them responsible and accountable for outcomes of their actions, will contribute to their competence and satisfaction.
It essentially flips the traditional hierarchy of an organisation on its head, from a traditional ‘top down’ management structure to one where responsibility is placed with the employee. Many organisations will have an employee engagement expert as part of the HR team, which will work with staff to increase levels of wellbeing and productivity in an organisation; and employee engagement is the first step on the road to creating an empowered culture. However, it’s a big step forward, but one that if you get right can lead to a more entrepreneurial business, which in our service-driven economy, can lead to increased profitability. But where do you start?
In an empowered organisation, the role of management becomes that of facilitator, providing staff with the necessary resources, including information and training, and taking on their feedback to enable them to do the best possible job for the business and themselves.
Different levels of employee involvement may be appropriate for different industries and corporate cultures – it does not have to be viewed as an all-or-nothing proposition. The three widely recognised levels of involvement are:
1. Suggestion involvement – where employees are able to affect the business in a limited way through formal suggestion programmes but their day-to-day jobs are not directly affected. Should you adopt this level of empowerment, it is vital that you implement some of the suggested changes in order for your employees to feel they are being taken seriously.
2. Job involvement – where employees are given a wider range of what they consider to be meaningful tasks to help them gain a greater sense of achievement and satisfaction. Both job involvement and suggestion involvement do not require a significant change in the behaviour of senior management.
3. High involvement – where employees at all levels are fully involved in all aspects of the business, so share information, work in teams to solve problems and ultimately share in the success of the company. The number of organisations successfully achieving this ideal is small – not only does it require the right managerial talent but the resources it involves are significant.
Why consider employee empowerment?
The impact of downsizing, de-layering and decentralisation means that the old methods of achieving co-ordination and control are often no longer appropriate. It is becoming increasingly clear that the engines for organisational development are not analysts, but the managers and people who do the work.
Achieving lasting improvements in performance and greater long-term profitability requires that staff are given much greater responsibility. By empowering employees to determine their own work methods, companies can benefit from the years of experience and knowledge each employee has. This leads to higher morale because employees know their ideas are taken on board and that they are valued members of the workforce, and that encourages staff loyalty and increases productivity. Other benefits are less absenteeism and higher staff retention rates – all of which also have a positive effect on the bottom line.
In the book Corporate Culture and Performance, Harvard Business School professors, John Kotter and James Heskett, state that companies with strong and flexible business cultures that take into consideration all stakeholders and have empowered managers, outperformed companies that did not exhibit these characteristics. They did so on revenue growth (682 per cent versus 166 per cent), share price increases (901 per cent versus 74 per cent) and net income increase (756 per cent versus 1 per cent).
Is your culture right for such a shift in organisational structure?
When workers are empowered, middle managers must make the transformation from being a supervisor to becoming a facilitator, motivator and coach. This can be a very difficult, even threatening change for many managers but it is a change in mind-set that is fundamental to the success of employee empowerment. Leaders have to be strong on emotional intelligence, capable of developing teams, listening well and communicating properly, able to harness the abilities and strengths of everyone, while maintaining a collective focus.
Similarly, not all employees are looking for responsibility and personal growth. In this instance, management can change its organisational culture to be more supportive or empowerment-friendly to convey how beneficial it can be to staff morale but it won’t provide a quick ‘fix’. Coaching and training can help people to overcome fears and good, old-fashioned open communication can work wonders – just listening to an employee’s fears and uncertainties can make a big difference.
There are also certain organisations that are not suited to employee empowerment. Generally speaking, the more a business relies on establishing long-term relationships with its customers, as opposed to engaging in short, infrequent transactions, the greater the value it will gain from employee empowerment.
Stable situations make empowerment much less necessary because they allow management to compile ideal responses to anticipated situations in advance. Other conditions where we would advise against empowerment are businesses where turnover is high and pay is low because the cost of training simply isn’t worth it. There are also industries where government regulations or technical requirements severely limit the breadth of employee discretion, such as accounting practices or the management of nuclear power plants.
What are the golden rules for effective employee empowerment?
Communication is one of the cornerstones of empowerment and managers and frontline staff need to engage openly at all times if it is to succeed.
For staff to feel empowered they need to believe that management communicates a clear direction for the future, that they are working in alignment with the CEO and the board, that the organisation cares about them and that performance reviews are fair and helpful.
It is also vital that a no-blame culture is adopted; employees should be made to realise that their failures are viewed as stepping stones to success and that training is available to fill in their gaps in understanding or skills when they become evident.
Management should monitor employee performance and step in to assist when they fall short of their goals before productivity is significantly affected. Empowered employees should not be allowed to work as independent entities within an organisation – it is not an invitation to anarchy.
If you feel your organisation could benefit from an empowered workforce, it is absolutely vital that you adopt a level of empowerment that your employees are comfortable with. The only way you will know this is through open and direct consultation.
It will be necessary to speak to people at all levels of the organisation because empowerment will affect different roles in different ways – similarly, some people will accept the principles of empowerment quicker than others. Focus groups can be introduced to provide staff with a platform for open, productive discussion.
In order to affect such a significant change you will need to ensure you have the support and buy-in of everyone – it is vital that all staff understand the benefits and pitfalls, and that they are invested in making the change happen and in making it work. Empowering leadership should be written into a company’s values and has to be lived by every manager.
Once you have buy-in, the change needs to be formally and gradually introduced. Employee empowerment workshops can be very successful in making the transition an easier one. There are also specialist training courses and advisors on hand to help.
How do you implement and monitor such a huge organisational change?
One of the most important aspects of effective employee empowerment is an appreciation of both the benefits and the costs attached to its implementation within a business. It is also important to bear in mind that such significant change will not happen overnight. Attitudinal change is a long process so you need to be prepared for it to take time.
Along with communication, the key elements of effective employee empowerment are an efficient hiring system, effective and regular training and employee appraisals.
Businesses need to ensure they hire people who are comfortable with being empowered, so recruitment needs to be organised to identify and attract people who will thrive within an empowered culture. In terms of managerial appointments, businesses have to be sure they are happy to lead and facilitate rather than manage and control.
Hiring and retaining employees with the initiative and abilities to work successfully in this way may also require higher wages. There are also higher training costs involved. After hiring, employees will need to be trained to not only understand the company and its products but also their roles and the limitations of their discretion. They will also need a solid understanding of the teamwork and communications skills that are needed to work effectively within such a culture. These higher training costs also means that in some cases the use of temporary workers becomes impractical so it may be necessary to keep on a larger, periodically under-utilised, trained workforce.
Employee appraisals or performance reviews need to recognise what people have done well, rather than only emphasising what could have been done better – if not, staff will feel demoralised. Performance should be measured against any goals that were set, with work reviewed over the longer term, not just around the time of the appraisal. In an empowered workforce, staff should also be asked to review managers.
It is also important to set yourself mid to long-term goals and to regularly monitor progress against the objectives you have set. Also bear in mind that adjustments will need to be made along the way. The process will require continued communication with staff across the whole business to gauge satisfaction levels and regular financial monitoring to assess the impact on productivity levels, the costs incurred and benefits to the bottom line.
The impact of any organisational change will be felt by your staff first. If you handle their concerns in the right way, the rest will follow.
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