Employee Empowerment

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1994

Employee Empowerment:

A study of employeeparticipation (empowerment) in promotion,evaluation, job content, technological change,work standards, financial policies, cost control,organization structure, work force size, safetyprograms, work methods, and pricing.

Employee empowerment or participativedecision making is neither a new or simplemanagement concept. Employee participationis a complex management tool that over 50years of research has proven that, whenapplied properly, can be effective inimproving performance, productivity and jobsatisfaction[1].The purpose of this article is to provide ageneral review of what has been written aboutemployee empowerment or participation.This review contains a history of participation, areas, methods, and forms of participation and factors essential foreffective participation. Also, there areappropriate situations that call for the use of participation, since not every employee canparticipate in every decision. In addition,participative decision making carries certainramifications with it affecting theorganization and employee. Finally, theeffectiveness of participative decision makingis examined noting that studies have producedmixed to moderate results with the finalassessment being that if certain guidelines arefollowed, participative management can besuccessful.

History of Participation

Worker participation has been a popular topicof studies of organizational behavior since the1940s and 1950s. Those who entered the fieldearly were far more successful in creating afield for academic study than establishing alink with practical application. Even theearliest findings suggested that great potentialexisted for improving job satisfaction andperformance through the use of workerparticipation. However, researchers in theacademic field had little success in interestingmanagement in this concept[2].After World War II, the United States wasknown around the world for its superiormanagement methods, and productivity teamscame to the United States from Europe tolearn them. US managers did not feel therewas any reason to change their currentthinking on management. Since at that timetheir methods were so successful, they werenot receptive to ideas about participativemanagement[2].During the period after World War II, anumber of Japanese professors and managerscame to the United States. The Japanese readthe literature published by the academics andassumed they were reading about the actualpolicies and practices of US companies. Theypicked up the ideas provided to them by thesehuman relations researchers and returnedhome to redesign and reinterpret these ideas

Employee Empowerment

Nick Nykodym, Jack L. Simonetti, Warren R. Nielsen and Barbara Welling

Empowerment in Organizations, Vol. 2 No. 3,1994, pp. 45-55 © MCBUniversity Press, 0968-4891

This research was made possible by aManagement Academic Challenge grant from theUniversity of Toledo, Ohio.

:AN INTERNATIONAL JOURNAL

to rebuild their organizations. For example,the origin of quality circles can also be tracedto the United States. In 1951, W. EdwardsDeming spent several weeks in Japanlecturing and demonstrating methods of quality control. The Japanese, well aware of their reputation for poor quality products,eagerly accepted Deming’s suggestions[2].About the same time the Europeans andJapanese were invading the United States togain managerial knowledge, Sears instituted asurvey program designed to measureworkers’ and supervisors’ reaction to humanrelations in the company and various aspectsof their jobs. Sears also developed a way toreport the results back to the managers. Soonmore and more companies began developingtheir own internal survey programs and beganexchanging ideas with each other[2].

Japanese management style placed a high emphasis on human relations

By the 1960s and 1970s worker participationprograms were on the rise in the UnitedStates. Quality circles used in the UnitedStates had been readapted to our culture fromthat of the Japanese. Rather than having themanagement in control, as in Japan, theUnited States programs were administered jointly by leaders of management andlabor[2]. In the United States, participativemanagement was often confined to a task orspecial project and as soon as the problemwas solved or the goal achieved, participationceased instead of being supported as acontinuous management practice[2]. Duringthis time, participative management ideasbegan to create a considerable amount of interest among management theorists andpractitioners, and workshops and courses onthese management techniques began toappear[3].As we moved into the 1980s, it becameclear that we were no longer competingeffectively with the Japanese. Japanesemanagement style placed a high emphasis onhuman relations, and as a result, by the mid-1980s arguments for participation becameeven stronger[3]. Today, it is likely thatparticipative management will increase in the1990s because of the complexity of decisionsthat will need to be made in a changingenvironment and the increasing pressure of world competition[3].History has shown that organizations havetaken these management ideas and adaptedthem to their own culture. As a result fourbroad areas of employee participation andthree methods of application have beendeveloped. Any combination of thesedetermines the form of participation used.

Areas, Methods and Forms ofParticipation

One of the four areas of participation is goalsetting. Employees can take part inestablishing a goal for a task, designing a jobor even the speed at which the work shouldtake place. Next, employees can take part inmaking choices among alternative courses of action presented to them such as workinghours, placement of equipment or simplychoices between set alternatives to complete aroutine task. Third, employees can take partin solving problems, which involves definingthe issues and setting the alternative coursesof action. Finally, participation may involvemaking organizational changes, such assetting company policies that might involvehiring, layoffs, profit sharing or investments.Employees may participate in any or all of these four areas at any one time[1,4].

1994

Three primary methods of participationapply to all areas of participation. Employeescan participate as individuals, making theirown decisions and setting their own goals, orthey may pair up with a manager to form adecision-making team. All employees mayparticipate in a decision-making group withother members of the group being managersor co-workers[1]. This participation may beformal as in quality circles or may beinformal with members of a group expressingopinions in order to reach some consensus.Employees may participate directly indecision making or indirectly through arepresentative elected to present employeeideas or concerns to a group[4].There are several combinations of methodsand areas of decision making, but as a resultof testing, six basic forms have emerged.These forms can be best classified by howmuch influence organizational members havein making a decision[4].Participation in work decisions andconsultative participation both focus mainlyon work issues, such as what is to be done,how it is organized, and who will do what.Both of these types of participation are of theformal, direct and long-term type. The onlydifference between these two types of participation is the amount of influence thatthe employee has. Participation in work decisions carries much more influence, whereemployees have the final say. In consultativeparticipation, employees may give theiropinions but have no final decision makingpower. Some studies have found thatparticipation in work decisions generates amore positive attitude toward supervisors andthe company. Also, though results of somestudies are mixed, there seems to be apositive trend toward job satisfaction whenconsultative participation is used. Qualitycircles and Scanlon plans fall into this group.Scanlon plans provide monetary bonuses forproductivity suggestions, while in contrast,quality circles concentrate on small groupsbut do not pay the monetary rewards[4].Like participation in work decisions andconsultative participation, short-termparticipation is formal, direct and focusses onwork issues, and workers have a high degreeof influence on the decisions made. The onlydifference is in the duration, which can rangefrom a single laboratory session to trainingsessions of several days. Studies of this typeof participation show either mixed results orno effect on job satisfaction, performance ormotivation, but show a positive relationshipto perceived influence[4].Some organizations do not have groupsestablished for formal participation, but doengage in participative decision makingthrough informal participation. This wouldoccur through interpersonal relationshipsbetween managers and subordinates andrevolve around issues directly concerning thesubordinate’s work. Studies have found thistype of participation to be positively relatedto job satisfaction, including the supervisorand the work itself, and motivation andcommitment[4].

Some employees mayeven participate directlyin decision making

Both formal and indirect participation arefound in employee ownership. It is formalbecause the employees have the right toparticipate as stockholders, and indirectbecause even though the employees own thecompany, it is run by managers who make thestrategic decisions. Employees have a highlevel of influence through stockholdermeetings and election of the board of directors. Some employees may even

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Category:	Research > Business & Economics
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Upload Date:	09/29/2009
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