Theory X, Theory Y, and Theory Z

LEARNING OUTCOMES

 Differentiate between Theory X, Theory, Y, and Theory Z managers

 Explain the implications of Theory X, Theory Y, and Theory Z for employee management

McGregor’s Theory X and Theory Y

The idea that a manager’s attitude has an impact on employee motivation was originally
proposed by Douglas McGregor, a management professor at the Massachusetts Institute of
Technology during the 1950s and 1960s. In his 1960 book, The Human Side of Enterprise,
McGregor proposed two theories by which managers perceive and address employee
motivation. He referred to these opposing motivational methods as Theory X and Theory Y
management. Each assumes that the manager’s role is to organize resources, including
people, to best benefit the company. However, beyond this commonality, the attitudes and
assumptions they embody are quite different.

Theory X

According to McGregor, Theory X management assumes the following:

 Work is inherently distasteful to most people, and they will attempt to avoid work
whenever possible.
 Most people are not ambitious, have little desire for responsibility, and prefer to be
directed.
 Most people have little aptitude for creativity in solving organizational problems.
 Motivation occurs only at the physiological and security levels of Maslow’s hierarchy of
needs.
 Most people are self-centered. As a result, they must be closely controlled and often
coerced to achieve organizational objectives.
 Most people resist change.
 Most people are gullible and unintelligent.

Essentially, Theory X assumes that the primary source of employee motivation is monetary,
with security as a strong second. Under Theory X, one can take a hard or soft approach to
getting results.

The hard approach to motivation relies on coercion, implicit threats, micromanagement, and
tight controls— essentially an environment of command and control. The soft approach,
however, is to be permissive and seek harmony in the hopes that, in return, employees will
cooperate when asked. However, neither of these extremes is optimal. The hard approach
results in hostility, purposely low output, and extreme union demands. The soft approach
results in a growing desire for greater reward in exchange for diminished work output.
It might seem that the optimal approach to human resource management would lie
somewhere between these extremes. However, McGregor asserts that neither approach is
appropriate, since the basic assumptions of Theory X are incorrect.

Drawing on Maslow’s hierarchy of needs, McGregor argues that a need, once satisfied, no
longer motivates. The company uses monetary rewards and benefits to satisfy employees’
lower-level needs. Once those needs have been satisfied, the motivation disappears. Theory
X management hinders the satisfaction of higher-level needs because it doesn’t acknowledge
that those needs are relevant in the workplace. As a result, the only way that employees can
attempt to meet higher-level needs at work is to seek more compensation, so, predictably,
they focus on monetary rewards. While money may not be the most effective way to self-
fulfillment, it may be the only way available. People will use work to satisfy their lower needs
and seek to satisfy their higher needs during their leisure time. However, employees can be
most productive when their work goals align with their higher-level needs.

McGregor makes the point that a command-and-control environment is not effective because
it relies on lower needs for motivation, but in modern society those needs are mostly satisfied
and thus are no longer motivating. In this situation, one would expect employees to dislike
their work, avoid responsibility, have no interest in organizational goals, resist change, etc.—
creating, in effect, a self-fulfilling prophecy. To McGregor, a steady supply of motivation
seemed more likely to occur under Theory Y management.

Theory Y

The higher-level needs of esteem and self-actualization are ongoing needs that, for most
people, are never completely satisfied. As such, it is these higher-level needs through which
employees can best be motivated.

In strong contrast to Theory X, Theory Y management makes the following assumptions:

 Work can be as natural as play if the conditions are favorable.

 People will be self-directed and creative to meet their work and organizational objectives
if they are committed to them.
 People will be committed to their quality and productivity objectives if rewards are in
place that address higher needs such as self-fulfillment.
 The capacity for creativity spreads throughout organizations.
 Most people can handle responsibility because creativity and ingenuity are common in
the population.
 Under these conditions, people will seek responsibility.

Under these assumptions, there is an opportunity to align personal goals with organizational
goals by using the employee’s own need for fulfillment as the motivator. McGregor stressed
that Theory Y management does not imply a soft approach.

McGregor recognized that some people may not have reached the level of maturity assumed
by Theory Y and may initially need tighter controls that can be relaxed as the employee
develops.

If Theory Y holds true, an organization can apply the following principles of scientific
management to improve employee motivation:
 Decentralization and delegation: If firms decentralize control and reduce the number
of levels of management, managers will have more subordinates and consequently
need to delegate some responsibility and decision making to them.
 Job enlargement: Broadening the scope of an employee’s job adds variety and
opportunities to satisfy ego needs.
 Participative management: Consulting employees in the decision-making process
taps their creative capacity and provides them with some control over their work
environment.
 Performance appraisals: Having the employee set objectives and participate in the
process of self-evaluation increases engagement and dedication.

If properly implemented, such an environment can increase and continually fuel motivation as
employees work to satisfy their higher-level personal needs through their jobs.

Ouchi’s Theory Z

During the 1980s, American business and industry experienced a tsunami of demand for
Japanese products and imports, particularly in the automotive industry. Why were U.S.
consumers clambering for cars, televisions, stereos, and electronics from Japan? Two
reasons: (1) high-quality products and (2) low prices. The Japanese had discovered something
that was giving them the competitive edge. The secret to their success was not what they were
producing but how they were managing their people—Japanese employees were engaged,
empowered, and highly productive.

Management professor William Ouchi argued that Western organizations could learn from
their Japanese counterparts. Although born and educated in America, Ouchi was of Japanese
descent and spent a lot of time in Japan studying the country’s approach to workplace
teamwork and participative management. The result was Theory Z—a development beyond
Theory X and Theory Y that blended the best of Eastern and Western management practices.
Ouchi’s theory first appeared in his 1981 book, Theory Z: How American Management Can
Meet the Japanese Challenge. The benefits of Theory Z, Ouchi claimed, would be reduced
employee turnover, increased commitment, improved morale and job satisfaction, and drastic
increases in productivity.

Theory Z stresses the need to help workers become generalists, rather than specialists. It
views job rotations and continual training as a means of increasing employees’ knowledge of
the company and its processes while building a variety of skills and abilities. Since workers
are given much more time to receive training, rotate through jobs, and master the intricacies
of the company’s operations, promotions tend to be slower. The rationale for the drawn-out
time frame is that it helps develop a more dedicated, loyal, and permanent workforce, which
benefits the company; the employees, meanwhile, have the opportunity to fully develop their
careers at one company. When employees rise to a higher level of management, it is expected
that they will use Theory Z to “bring up,” train, and develop other employees in a similar
fashion.

Ouchi’s Theory Z makes certain assumptions about workers. One assumption is that
they seek to build cooperative and intimate working relationships with their coworkers. In other
words, employees have a strong desire for affiliation. Another assumption is that workers
expect reciprocity and support from the company. According to Theory Z, people want
to maintain a work-life balance, and they value a working environment in which things like
family, culture, and traditions are considered to be just as important as the work itself. Under
Theory Z management, not only do workers have a sense of cohesion with their fellow
workers, they also develop a sense of order, discipline, and a moral obligation to work hard.
Finally, Theory Z assumes that given the right management support, workers can be trusted
to do their jobs to their utmost ability and look after for their own and others’ well-being.

Theory Z also makes assumptions about company culture. If a company wants to realize
the benefits described above, it need to have the following:

 A strong company philosophy and culture: The company philosophy and culture
need to be understood and embodied by all employees, and employees need to believe
in the work they’re doing.
 Long-term staff development and employment: The organization and management
team need to have measures and programs in place to develop employees.
Employment is usually long-term, and promotion is steady and measured. This leads to
loyalty from team members.
 Consensus in decisions: Employees are encouraged and expected to take part in
organizational decisions.
 Generalist employees: Because employees have a greater responsibility in making
decisions and understand all aspects of the organization, they ought to be generalists.
However, employees are still expected to have specialized career responsibilities.
 Concern for the happiness and well-being of workers: The organization shows
sincere concern for the health and happiness of its employees and their families. It
takes measures and creates programs to help foster this happiness and well-being.
 Informal control with formalized measures: Employees are empowered to perform
tasks the way they see fit, and management is quite hands-off. However, there should
be formalized measures in place to assess work quality and performance.
 Individual responsibility: The organization recognizes the individual contributions but
always within the context of the team as a whole.

Theory Z is not the last word on management, however, as it does have its limitations. It can
be difficult for organizations and employees to make life-time employment commitments. Also,
participative decision-making may not always be feasible or successful due to the nature of
the work or the willingness of the workers. Slow promotions, group decision-making, and life-
time employment may not be a good fit with companies operating in cultural, social, and
economic environments where those work practices are not the norm.

Advantages of Participative Management

Undoubtedly participative approach to management increases the stake or ownership of

employees. But there is more to it. The following points elucidate the same.

 Increase in Productivity: An increased say in decision making means that there is a

strong feeling of association now. The employee now assumes responsibility and takes
charges. There is lesser new or delegation or supervision from the manager. Working
hours may get stretched on their own without any compulsion or force from the
management. All this leads to increased productivity.
 Job Satisfaction: In lots or organizations that employ participative management, most
of the employees are satisfied with their jobs and the level of satisfaction id very high.
This is specially when people see their suggestions and recommendations being
implemented or put to practice. Psychologically, this tells the individual employee that,
‘he too has a say in decision making and that he too is an integral component of the
organization and not a mere worker’.
 Motivation: Increased productivity and job satisfaction cannot exist unless there is a
high level of motivation in the employee. The vice versa also holds true! Decentralized
decision making means that everyone has a say and everyone is important.
 Improved Quality: Since the inputs or feedback comes from people who are part of
the processes at the lowest or execution level. This means that even the minutest
details are taken care of and reported. No flaw or loophole goes unreported. Quality
control is thus begins and is ensured at the lowest level.
 Reduced Costs: There is a lesser need of supervision and more emphasis is laid on
widening of skills, self management. This and quality control means that the costs are
controlled automatically.

Disadvantages of Participative Management

There is a flip side to everything; participative management stands no exception to it. Whereas
this style of leadership or decision making leads to better participation of all the employees,
there are undoubtedly some disadvantages too.

 Decision making slows down: Participative management stands for increased

participation and when there are many people involved in decision making, the process
definitely slows down. Inputs and feedback starts pouring from each side. It takes time
to verify the accuracy of measurements which means that decision making will be
slowed down.
 Security Issue: The security issue in participative management also arises from the
fact that since early stages too many people are known to lots of facts and information.
This information may transform into critical information in the later stages. There is thus
a greater apprehension of information being leaked out.

The advantages seem to outnumber the disadvantages. This however is no assurance that
one should blindly adopt it for his/her organization. Organizations are different and therefore
the culture, the human resources. A deep understanding of both is required in order to
ascertain a decision making style and adopt the same.

There are other problems that often arise with the managers. The problems may arise because
of the following:

1. Managers often view it as the ends and not as a tool.

2. There is confusion if whether participative management means democratization.
3. Managers sometimes manipulate the process for their own advantage.

Participative Management may fail because of the following reasons:

 Resistance to Change: Participative Management calls for a change in the entire

organizational culture. Older employees specially resist change and do not welcome
it. They take it as a device to curtail their powers. Training is also not welcome.
 Workers tendency to deviate: Managers must be aware of the tendency of the
workers to try spending more time formulating strategies than focus on job in hand.
This needs to taken care of. Again top level management may not support this style if
they find existent inefficiencies.
 One stop Solution: Participative management can not always be a one stop solution
for every problem. Often the manager needs to delegate or take a decision on his own
without consulting or seeking others advice. For example, cases where disciplinary
action is needed do not qualify for participative management.
 Size of the Organization: This style of management can be more difficult to
implement in organizations that are big in size. Big size means that there are large
numbers of management layers. This often makes registering opinions and
suggestions difficult. More difficult can be the implementation of the same.
 Abuse of Authority: Managers sometimes look upon their own jobs as a license
instead as a responsibility. They are unwilling to give away some authority to their
subordinate which slows down and chokes the process of decision making. Often such
managers complain of being overburdened with responsibilities. This fails the idea of
participative management.
 Misunderstanding Participation: This is yet another reason for failure of participative
management. Managers sometimes fail to understand that participative management
is not the same as delegating or distributing responsibility. They fail to realize that
participative style also involves considering the suggestions and recommendations of
employees with respect and dignity.

Participation is isolation can be of no use to the organization. It is a mere wastage of time and
resources then. Most of the organizations view it an end per se and not a mere tool. Once this
happens then participation can be used as an effective tool to problem solving.

What Managers Think of Participative Leadership

 Larry E. Greiner


An extroverted, sensitive leader who openly shares decisions and authority with subordinates—
this is the profile that emerged when 318 executives were asked their opinions on the
characteristics of participative leadership. While there is much discussion—and controversy—
among educators and theorists about the concept of participative leadership, managers
themselves have not yet been heard. In this study, the author found a surprising consensus
among managers regarding the operational characteristics and effectiveness of participative
leadership. But he also found some specific and noteworthy differences of opinion between
younger and older managers concerning which managerial actions get results. After discussing
the findings, he draws their implications for companies, individual managers, and management
educators.

During the past decade, vast numbers of executives have been schooled in the virtues of
participative leadership. Perhaps no other management concept has received so much recent
attention in management literature, in company training programs, and in the general press.
Educators, in particular, have consistently admonished managers to open up their decision-
making activities to their subordinates. Youthful critics of big business have also added fuel to
the fire, contending that industrial organizations are too closed and undemocratic.

At the same time, however, there has been considerable confusion and diversity of viewpoint
among management educators and social theorists over just what is meant by such a vague
concept as participative leadership. To some, it means group decision making; to others, it is
mutual goal setting; and to still others, it implies listening more and talking less.

These differing interpretations are further clouded by such abstract labels as 9, 9 management,
Theory Y, and management by objectives. In addition, scholarly critics in the wings confuse the
issue by arguing that managerial styles are idiosyncratic and are determined more by an
executive’s personality and early background experiences than by “charm schools” in
participative leadership.

But where have the managers themselves—the targets of these participative pleas, conflicts,
and slogans—been all this time? While there has been considerable talk from educators and
Sunday morning quarterbacks, very little is known about how the participative message has
been absorbed at the managerial level. This is the age-old problem of hearing more from the
teachers than from the learners. Consider these important questions in need of new answers:

 What concrete behavioral characteristics do managers actually associate with the vague
abstraction called participative leadership?
 Do managers differ widely in their specific interpretations of participative leadership, or
is there a relatively uniform understanding? (For example, do younger managers
subscribe more to participative methods than do older executives?)
 Most critical, even if managers understand and agree on the practical aspects of
participative leadership, do they believe that participation will lead to more effective
results?

The purpose of this article is to shed light on these questions by reporting the responses of 318
executives to a questionnaire that was administered while they were attending management
education programs at the Harvard Business School. (A profile of these executives appears in
the sidebar.)

The reader will be able to compare his own understanding of participation with those reported
by this sample of executives. Just as important, knowing more about managerial perceptions of
leadership style can help educators assess the extent to which their participative message has
found its mark.

Theories in Conflict

Before I report the study findings, let me briefly review two basic and often opposing schools of
thought about leadership style. In doing so, I shall define leadership style quite simply as
a pattern of interacting with subordinates.

Previous research has identified a variety of leadership patterns, such as participative,

authoritarian, laissez-faire, task-oriented, and so forth. The most discussed and popular of these
has been participative leadership.

Advocates of the participative style fall into what I call the “actor” school of thinking.1 Their key
assumption is that managers are like sensitive players in a drama, relatively flexible and able to
alter their behavioral styles, even in the later years of life. They see managers as able to exercise
conscious, rational control over their own behavior and to adapt continuously to new cues and
role demands placed on them by their organizations.

With this model of a highly receptive leader in mind, members of the actor school emphasize
the use of management education to convert executives to a participative style. As a result of
their influence, thousands of managers have been exposed to company and university programs
stressing both the humane and the productive aspects of participative leadership. These
programs, however, have varied in their particular brand of participative leadership—some have
focused on team decision making; others have placed emphasis on joint goal setting; and still
others have taught listening skills for two-way communication.

Opposed to the actor school is what might be called the “born-leader” school.2 Its members take
the position that a leader’s style is deeply rooted in his or her personality, which in turn is a
complex product of genetic inheritance and the maturation process. They see each manager’s
style as representing a highly individualistic, often unconscious, pattern of acting out ingrained
values, conflicts, and attitudes acquired over many years. And they express strong doubts that
managers can easily adopt new forms of behavior as they become older.

Stated simply, the conflict between the two groups is this:

 The actor (participative) school holds that leadership behavior can be taught and is
largely determined by external cues from the environment.
 The born-leader school holds that leadership behavior is individually developed and that
it is largely determined by internal personality characteristics.

Both groups, of course, cite research evidence to support their own position and refute that of
the other. The born-leader proponents, for example, point to the fact that people who choose
professional careers tend, in greater numbers than could be expected by chance, to be first born
children in their families.3 The participative enthusiasts, however, often refer to numerous
studies of company training programs showing how managers have altered their behavior in a
participative direction.4

Yet both groups would agree that knowing more about a manager’s assumptions concerning
leadership style is vitally important. Every manager carries around in his head certain “rules of
thumb” that guide his behavior in leadership situations. It is these mental guidelines that I shall
attempt to uncover in this article.

Interestingly enough, the findings reported here lend credence to both the actor and born-leader
schools. While managers have definitely been attracted to participative leadership, they also
have made some unique and personalized translations of it to fit their particular career situations.

The Managerial Viewpoint

As mentioned earlier, two objectives of this study were (1) to discover what managers consider
to be the concrete characteristics of participative leadership and (2) to determine whether they
think such a style leads to effective results. Accordingly, the 318 managers in the study were
given a questionnaire containing 39 leadership characteristics. Then they were divided into two
groups:

The first group of 157 managers was told to rate each characteristic on a scale from 1 to 7, with
1 equal to low participation and 7 equal to high participation. They were asked to base their
ratings on their own past experiences as managers.

The second group of 161 managers was told to check (a) the 5 characteristics that they found
to be most effective in handling managerial situations, and (b) the 5 characteristics that they
found to be least effective. They also were asked to base their judgments on past experience.

Let us now turn to an in-depth look at the responses of these two groups. (Before proceeding,
however, I should note that while the questionnaire was based on extensive past research and
included a wide span of behavior, the findings of this study are necessarily limited to the 39
questionnaire items.)

What is participation?

Despite the fact that participative leadership is an abstract concept, the managers in the study
reached a high level of agreement in rating specific characteristics on the 1-to-7 participation
scale. Among the managers in the first group who rated the 39 items only for extent of
participation, the average correlation of agreement is .74 out of a perfect 1.00. Even higher is
their agreement in rating items at the extreme ends of the scale. No significant differences
appear between younger and older managers, among types of educational background, or
among current job positions.
This high level of agreement suggests that the study managers hold a reasonably clear and
uniform understanding in their concrete interpretation of participative leadership. Such unanimity
is quite remarkable considering the different interpretations that educators have given the
concept of participation. Even the questionnaire items, because of their limited wording, are
subject to divergent interpretation. Yet the managers in this study apparently were not misled.

A more complete picture of participative leadership emerges from the listing of the 10 highest-
ranked characteristics of participative behavior in Exhibit I. The ultimate participative act, for
example, is viewed as including one’s subordinates in the decision-making process. Here the
respondents move significantly away from the classical notion of the manager acting as a sole
decision maker.

Exhibit I. The 10 Highest Participation Characteristics

At the same time, however, a variety of other characteristics combine to define a prototype
participative leader. It is doubtful that a manager can open up the decision-making process
without including some of these other participative actions. According to the respondents, the
participative leader also—

…maintains free-flowing and honest communication;

…remains easily accessible;

…stresses development for his subordinates;

…expresses consideration and support;

…is willing to change.

Here is a picture of a sensitive, extroverted, and emotive leader who actively stays in close
contact with his subordinates and is attuned to their needs.

Moreover, these findings indicate that education and training in participative leadership have,
indeed, had an effect. Managers in the study, lending support to advocates of the actor
(participative) school, are in relative agreement about the specific actions they would rate as
being highly participative. A prototype participative style emerges (from the 10 highest items)
which encompasses much of what has been conveyed in the literature on this subject.

But is participative leadership also viewed by these managers as the most effective style? Or
are certain low participation characteristics also deemed effective? These are important
questions, because the actor-school advocates have long portrayed the participative leader as
the man who not only is more humane but also gets the best results.

Let us now look at the leadership characteristics selected by the managers in the second group;
this is the group that rated the 39 questionnaire items for effectiveness but not for participation.

What gets results?

The executives in the second group generally picked characteristics that were rated high on
participation by those in the first group. Exhibit II presents the 10 items that received the most
votes for being highly effective. These same items, when rated on the 7-point participation scale
by the first group of executives, received an average rating of 5.03, which is decidedly toward
the high-participation end of the scale. Put another way, 7 of the 10 top effective actions listed
in Exhibit II also appear among the highest participation items in Exhibit I.

Exhibit II. The 10 Most Effective Leadership Characteristics

Of the entire list of leadership characteristics, the item with the highest effectiveness rating is
concerned with training and developing subordinates (which challenges a common stereotype
that managers are preoccupied only with daily decision making). These managers place
considerably more value on the role of manager as teacher than as decision maker. One
explanation for this pedagogical concern of the study managers is that they completed the
questionnaire while they were involved in a management development and training program.
More likely, however, is the pragmatic explanation that they realize it is in their self-interest to
develop a job replacement for themselves, thus making their own promotion possible.

Once again it appears that the advocates of participative leadership can take comfort in the
findings—i.e., participation is seen by the respondents as being related to more effective
performance. Whether these same managers actually behave as participative leaders on the
job, however, is a question for other studies to answer. Also, since the questionnaire was
completed by separate groups, we cannot be sure if the managers do, in fact, make a conscious
link between participation and effectiveness. Nevertheless, the link is indirectly evident in the
findings, so whether the managers in the study know it or not, they place themselves in the
participative camp.

Some Significant Exceptions

On closer examination, the study findings reveal some distinct and important exceptions to an
“across the board” consensus on participative leadership. The study managers are clearly less
in agreement about the meaning of effective behavior than they are about participative behavior.
In Exhibit I, there was a very high correlation of agreement in rating each item for high and low
participation. Yet, in Exhibit II, only the first-ranked effectiveness item—“Counsels, trains, and
develops subordinates”—was checked by more than 50% of the respondents. Of the remaining
top 10 items, 6 were checked by less than one third of the respondents.

This wider variance in choice of effective behavior suggests a rather loose link between
perceptions of effectiveness and of participative leadership. A manager guided exclusively by
effectiveness criteria will apparently favor actions that are not included in a strict interpretation
of participative leadership.

Advocates of participation, of course, might claim that this divergent view of effectiveness is
caused by some uninformed managers who have not yet realized the full merits of behaving
solely within a participative style.

But a more positive and pragmatic explanation emerges when the 10 top participation items in
Exhibit I are matched with the 10 top effectiveness items in Exhibit II. Significantly, the first 4
items on the effectiveness list are completely different from the first 4 items on the participation
list. Moreover, the 4 highest-rated effectiveness characteristics in Exhibit II ranked only 5, 6, 20,
and 26, respectively, in a complete ranking of the participation items by the first group of
managers.

Special attention should be given to the effectiveness characteristics ranked 3 and 4 in Exhibit
II. These two items, which are concerned with high performance expectations, ranked only 20
and 26 on extent of participation. Such a strong emphasis on performance reflects a noticeable
exception to our earlier prototype of the participative leader who is warm, emotive, and open.

In short, keeping subordinates aware of high performance expectations seems quite important
to the managers in the study, even if this means using directive action within an overall
participative style. Perhaps they feel that subordinates can misread an orthodox participative
leader as being more concerned for their psyches than for the fruits of their labor.

Career influences

Further analysis of the effectiveness ratings provides support for the born-leader advocates.
While the main thrust toward a meshing of participation and effectiveness remains essentially
unchanged, different age groups display important variances on a few of the effectiveness
ratings.

Exhibit III highlights 7 of the 39 characteristics for which a statistical test revealed substantial
differences according to age. These results suggest that a manager’s career stage may
influence his specific leadership orientation, even when he operates within a broader
participative framework. Consider the influence on these three managerial groups:

Exhibit III. Age Differences in Effectiveness Ratings

1. Younger managers in the study tend to take what Abraham Zaleznik calls a “proactive” stance;
they stress (a) work priorities, (b) proving their technical competence, and (c) backing up
subordinates.5 This more aggressive orientation is understandable if one views younger
managers as full of energy and enthusiasm, yet possessing self-doubts about their own
competence. In addition, these managers are usually in lower-level or specialist positions, where
they must visibly demonstrate their talents while also coping with heavy workloads and intense
pressure for results.

2. Managers between 30 and 40 years of age emphasize a more “mediative” approach. Most of
these executives are in middle-management jobs where they must deal with eager subordinates
as well as complex tasks that require numerous trade-offs. Hence, they are exceptionally
favorable to (a) taking a more personalized approach to others, (b) relating to subordinates, and
(c) making group decisions. Psychologically, this is a time when the middle manager is often
exploring his ability to handle heavier responsibility while taking greater risks, so he
understandably turns to others for consultation and support.

3. Managers in the over-40 group display a shift toward “homeostatic” or fatherly and
maintenance concerns. These older executives, who are usually in top management, seem
strongly preoccupied with counseling, developing, and training subordinates; partly, I surmise,
because they wish to leave behind some of their own personal attributes and wisdom, as well
as to keep the organization in good health. They are also concerned with the broad issue of
communications; top managers frequently feel guilty and lonely in their insulated positions,
where responsibility is high for maintaining a clear flow of communications throughout a complex
organization.

All the foregoing exceptions suggest that one should be cautious in prescribing a uniform
participative style for leaders at all levels of an organization. The born-leader theorists would
agree, contending that legitimate behavioral variations occur naturally because managers seek
to satisfy different personal needs as they mature in a hierarchy of upward job moves.

Moreover, a company without several older managers worrying about the development of future
managers would be seriously handicapped. It is probably too much to expect this teaching
responsibility to be filled primarily by middle managers who are consumed mainly by task
demands, or by younger managers who are worried about their own development. Their
respective uses of participative leadership will likely be slanted to fit different psychological and
organizational concerns.

These results also lead me to further question the current fad toward early retirement for older
managers in order to give younger managers more responsibility sooner. Companies should
learn that all three age groups contribute differently to the organization, and that this variance in
contribution should be more sensitively accounted for in manpower planning and performance-
assessment decisions. One cannot measure all managers on a common set of standards.

In addition, individual managers should learn to be more aware of their own developmental
needs as they make the transition from one job level to the next in organizations. Younger
managers, for example, will probably have to master the skills of group decision making to
perform effectively at middle levels. As they become ready for senior positions, they will have to
develop talents in training subordinates. Company educational programs and personnel
counseling services can also aid in solving these transitional problems.

Conclusion

The implied message from managers in this study is: “Let’s stop beating our chests over the
abstract virtues of participative leadership and settle down to defining its more specific uses and
limitations in actual practice.” For these managers, the choice of leadership style is not between
participation and directiveness, nor is it between the actor and born-leader theories. Their
reaction to the organizational and psychological reality that faces them in actual practice is to
include aspects of all these pulls and tugs.6

If executives in this study are representative, one can state that the managerial population at
large has already absorbed well the message of participative leadership. There is not only
consensus on the specific characteristics that comprise a participative style, but also general
agreement that certain participative leadership characteristics produce more effective results.
This connection between participation and effectiveness is significant because managers are
more likely to act in a participative manner if they believe their actions lead to better results.

Thus the managers in the study are decidedly ahead of those social critics who claim that
business executives are a bunch of authoritarians concerned only with manipulating their
“puppet” subordinates.7 They are also beyond those participative educators who assume that
businessmen are still waiting to be convinced that participation is a good thing.

Yet these managers do not accept participation on the basis of blind ideology. Instead, they
seem to be saying that participative advocates should doff their doctrinaire hats and apply
themselves to the application of participative leadership in more pragmatic and more flexible
terms. They are quite willing, for example, to use a few directive actions to keep high
performance goals in front of subordinates. They are also willing to translate participation to fit
their current career and job situations. Thus a young manager on the firing line is likely to employ
participative actions differently from an older manager in a senior position.

Such personalized leadership adaptations seem to make good practical sense, for the benefit
of both organization performance and a manager’s mental health. For the managers whose
opinions are represented here, participative leadership appears to be a sound concept, but only
if presented as a general model within which individual leaders can exhibit a variety of actions
to satisfy different personal and career needs.

1. For articles appearing in past issues of HBR that represent this point of view, see Warren G.
Bennis and Philip E. Slater, “Democracy Is Inevitable,” March–April 1964, p. 51; Herbert H.
Meyer, Emanuel Kay, and John R.P. French, Jr., “Split Roles in Performance Appraisal,”
January–February 1965, p. 123; and Alva F. Kindall and James Gatza, “Positive Program for
Performance Appraisal,” November–December 1963, p. 153.

2. For articles appearing in past issues of HBR that reflect this point of view, see Harry Levinson,
“On Being a Middle-Aged Manager,” July–August 1969, p. 51; Abraham Zaleznik, “Management
of Disappointment,” November–December 1967, p. 59; and C. Wilson Randle, “How to Identify
Promotable Executives,” May–June 1956, p. 122.

3. See, for example, William D. Altus, “Birth Order and Its Sequelae,” Science, January 1, 1966,
p. 44.

4. For examples of this research, see Robert R. Blake, Jane S. Mouton, Louis B. Barnes, and
Larry E. Greiner, “Breakthrough in Organization Development,” HBR November–December
1964, p. 133; and Rensis Likert, The Human Organization (New York, McGraw-Hill Book
Company, 1967).

5. See “Managerial Behavior and Interpersonal Competence,” Behavioral Science, April 1964,
p. 156.

6. For HBR articles that take this point of view, see Jay W. Lorsch, “Beyond Theory Y,” May–
June 1970, p. 61; and Robert Tannenbaum and Warren H. Schmidt, “How to Choose a
Leadership Pattern,” March–April 1958, p. 95.

7. See, for example, William Irwin Thompson, At the Edge of History: Speculations on the
Transformation of Culture (New York, Harper & Row, 1971).

Employee Empowerment: Meaning, Importance, Advantages and Disadvantages

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Everything you need to know about employee empowerment. Employee empowerment is a

strategy and philosophy that enables employees to make decisions about their jobs.

Employee empowerment helps employees own their work and take responsibility for their
results, serve customers at the level of the organization where the customer interface exists.

Employee empowerment is the philosophy of enabling employees to make important

decisions related to their work and take more responsibility for their jobs.

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The logic behind employee empowerment is to foster accountability, build employee morale
and confidence, and create a sense of belongingness in the employees.

If employee empowerment is undertaken in an efficient way, it results in heightened

productivity, better quality of work and more job satisfaction. The process of empowerment
differs from organization to organization depending upon work culture and organizational
structures.

In this article we will discuss about employee empowerment.

Learn about:- 1. Introduction to Employee Empowerment 2. Meaning and Concept of

Employee Empowerment 3. Characteristics 4. Elements 5. Conditions and Actions 6.
Importance 7. Principles 8. Process 9. Methods 10. Advantages and Disadvantages 11.
Challenges.

Employee Empowerment in HRM: Meaning, Characteristics, Importance, Principles,

Process, Advantages and Disadvantages

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Contents:

1. Introduction to Employee Empowerment

2. Meaning and Concept of Employee Empowerment
3. Characteristics of Employee Empowerment
4. Elements of Employee Empowerment
5. Conditions and Actions for Effective Employee Empowerment
6. Importance of Employee Empowerment
7. Principles of Employee Empowerment
8. Process of Employee Empowerment
9. Methods of Employee Empowerment
10. Advantages and Disadvantages of Employee Empowerment
11. Challenges to Employee Empowerment

Employee Empowerment – Introduction

Employee empowerment is a strategy and philosophy that enables employees to make
decisions about their jobs. Employee empowerment helps employees own their work and take
responsibility for their results, serve customers at the level of the organization where the
customer interface exists.

It is the process of enabling or authorizing an individual to think, behave take action, and
comfort work and decision-making in autonomous ways. It is the state of feeling to take control
of one’s own destiny and learn more about what empowerment is and is not.

Employee empowerment is a two sided coin. For employees to be empowered the

management leadership must want and believe that employee empowerment makes good
business sense and employees must act. Employee empowerment does not mean that
management no longer has the responsibility to lead the organization and is not responsible
for performance.

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Stronger leadership and accountability is demanded in an organization that seeks to empower

employees. This starts with the executive leadership, through all management levels and
includes front line supervisors. It is only when the entire organization is willing to work as a
team that the real benefits of employee empowerment are realized.

For an organization to practice and foster employee empowerment the management must
trust and communicate with employees. Employee communication is one of the strongest
signs of employee empowerment. Honest and repeated communication from elements of the
strategic plan, key performance indicators, financial performance, down to daily decision
making.

Empowerment is the state of feeling self-empowered to take control of one’s own destiny. In
the words of Stephen Covey “An empowered organization is one in which individuals have the
knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective
organizational success.”

The organization has the responsibility to create a work environment which helps foster the
ability and desire of employees to act in empowered ways. The work organization has the
responsibility to remove barriers that limit the ability of staff to act in empowered ways.

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For example, the manager of the Human Resources department added weeks to the process
of hiring new employees by requiring his supposedly “empowered” staff members to obtain
his signature on every document related to the hiring of a new employee. Mr. Mahesh
empowered himself to discuss the career objectives he wished to pursue with his supervisor.
He told his supervisor, frankly, that if the opportunities were not available in his current
company, he would move on to another company.

If an organization has not been actively cultivating employee empowerment, it may take
considerable time and effort before employees start to respond. For an organization to enjoy
the returns from employee empowerment the leadership must diligently work to create the
work environment where it is obvious to all that employee empowerment is desired, wanted
and cultivated. Management’s responsibility is to create the environment for employee
empowerment.

When organizational leadership has started to take actions to encourage employee

empowerment it is then up to the employees to decide if they wish to take advantage of the
opportunity or not. It is not unusual for only a small minority to accept the challenge initially.
Also it is very likely that some fraction will never respond. It is the large middle group that must
be convinced to practice employee empowerment.

Most organizations have exactly the level of employee empowerment the management wants.
This is demonstrated by the amount of communications, level of training provided to
employees, opportunities for personal growth, the solicitation and implementation of ideas, the
recognition and reward system, promotion and advancement criteria, and uncountable little
signals from management that demonstrate whether employees are valued or not.

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Employee can demonstrate empowerment by suggesting areas or processes that might be

candidates for an empowerment project. Part of employee empowerment is the recognition by
management that often people who most know of pressing needs for improvement are those
who have to work in the process.

Employee empowerment can take the form of being asked to bring expert knowledge to
projects. Even if not a full time member of the project team the fact that competence and first-
hand experience are valued and an employee is willing to help demonstrates a level.

One of the strongest signs from employees is when they take the lead to advance their skills
and knowledge with education and training either provided by the organization or outside the
organization. Management has the obligation to create the environment that fosters employee
empowerment, employees have the duty to accept the opportunity and demonstrate they are
willing and capable.

Employee Empowerment – Meaning and Concept

Employee empowerment is the philosophy of enabling employees to make important

decisions related to their work and take more responsibility for their jobs. The logic behind
employee empowerment is to foster accountability, build employee morale and confidence,
and create a sense of belongingness in the employees.

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If employee empowerment is undertaken in an efficient way, it results in heightened

productivity, better quality of work and more job satisfaction. The process of empowerment
differs from organization to organization depending upon work culture and organizational
structures.

By delegating work to employees at all levels, the top management can direct its energy
towards important work. Human resources, in spite of being the most valuable factor of
production, are often underutilized. Employee empowerment helps to utilize the skills and
capabilities of the workers in the best possible manner.

Proper training and resources should be provided to the employees to make them capable of
taking good decisions by themselves. If employees are unable to take proper decisions, then
the very purpose of empowerment is defeated. Employee empowerment requires the
organization to be restructured by reducing levels of hierarchy.

A flat organizational structure supports empowerment. The role of the manager also changes
from that of a figure of top authority to a more supportive role. An environment of mutual trust,
commitment and dedication should be maintained for successful implementation of employee
empowerment.

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Empowerment refers to enabling a lower level employee to make all the decisions
required/relevant for carrying out his duties or discharge his responsibilities, on his own and
implement them.
Empowerment is the process of giving employees in the organisation the power, authority,
responsibility, resources, freedom to take decisions and solve work related problems. In order
to take such initiatives and decisions, they are given adequate authority and resources.

This allocation of authority is not based on the concept of “delegation” based relationship. In
empowerment it is a “trust based relationship”, which is established between management
and employees. It is a continuous process.

The empowered employee becomes “self-directed” and “self-controlled”. Empowerment

focuses on employees to make use of their full potential. On the other hand, empowerment
means giving up control on employees and letting every employee make decisions, set goals,
accomplish results and receive rewards. It means making a person able to manage by himself.
It is a process for helping right person at the right levels to makes the right decision for the
right reasons.

The concept of empowerment can be understood better through the following example:

Premier Optics Limited, Vangalapudi, produces and sells high qualitative contact lenses
through its retail outlets.

One day, a customer visited its Bangalore retail outlet along with a lens which had cracks. He
enquired from the salesman behind the counter, the cost of replacement of the lens. The
salesman examined these lens and identified that the lens was produced by Premier Optics
Ltd. and the cracks were developed due to the defect in the production process.

He told the same to the customer and noted the telephone number of the customer. He
informed the customer that the new lens will be supplied at the customer’s home next day at
10.00 a.m. without any cost.

The customer felt immensely happy. Being the production manager in the Zuari Cements Ltd;
the customer was confused of the decision of the salesman and asked him how could he
identify the production defects, being the salesman, how could he decide to replace the
product without referring the matter to the Finance Department. Then, the salesman replied
that the employees in the Premier Optics Ltd., are empowered to take and implement all
decisions relating to a operation based on the customer.

The customer has turned into a most loyal customer and acted as a link in the chain of
advertisements.
Employee Empowerment – Characteristics of Empowered Organisation

The characteristics of empowered organisations include:

i. The empowered organisations have a flat organisational structure and high degrees of
performing work systems.

ii. The attitude and mind-set of employees of empowered organisations are also quite different.
Each of the employees will be working towards the vision of the organisation, there will be
independent work teams at all levels, continuous improvement and learning, high degree of
belief system and trust, environment of openness, authenticity and acceptance, freedom from
all threats, accountability and commitment on the part of the employees, encouragement,
creativity and development in all activities, confidence at all times in the minds of the
employees.

iii. The empowered organisations invest a lot of time and effort in hiring, to make sure that new
recruits can handle freedom given at the work place, these organisations have loose
guidelines so that the employees can know their decision making parameters.

iv. Results are important than the process, open and strong communication network, most
importantly satisfaction of employees.

v. The empowered organisations also create the feeling of belongingness, and creativity is
encouraged among the employees. The employees also learn and teach the art of self-
leadership.

vi. Transparent ethics is another characteristic feature of empowered organisation.

vii. Secrecy and confidentiality are never the practices and cannot be found in any of the
organisation activity.

viii. The ideal sets of work practices are other added features of an empowered organisation.

ix. Flexible scheduling of work, uncompromising employee integrity, low employee turnover,
quality, productivity, self-directed work force, participative decision making systems, no
boundaries or borderless relationships and no hard rules are the important characteristic
features of an empowered organisation.

Employee Empowerment – Some Very Important Elements: Authority, Self-

Determination, Alignment, Skills, Resources and a Few Others
Following are some very important elements of empowerment, presence of which is
necessary for empowerment:

1. Authority – Ability of a team to take action, such as to budget, to have access to a petty
cash fund, etc.

2. Self-determination – Ability of a team to decide what problems to work on and what methods
are the best ones to use.

3. Alignment – A scale which measures how close an employee’s personal needs are aligned
to the organization’s needs.

4. Skills – The ability of a team to analyze and solve problems.

5. Resources – Those items necessary for a team to understand a problem and implement
solutions; also, the time to work on solutions, access to manufacturing engineers, etc.

6. Information – Ability of a team to have access to information, computers, financial figures,

etc.

7. Accountability – A scale which measures the level of accountability for a team’s actions and
results.

8. Self Confidence and Firm Determination – To be empowered, it is necessary to have a

certain level of Self Confidence and Firm Determination.

9. Personal Control – When any kind of empowerment is given, substantial self-control is

required

10. Faith and Trust – Faith and trust are two important ingredients which the employee must
have on employer and employer must have on employee.

11. Meaningfulness – The system of empowerment so designed must have mean fullness.

12. Task Impact – At the end the overall impact of implementation of empowerment must be
gauged.

Effective Employee Empowerment – Conditions and Actions

Conditions Necessary for Effective Employee Empowerment:

The following conditions are necessary for effective employee empowerment:

i. Provide the information of the company to all employees;

ii. Employees should have multi-skills and knowledge;

iii. Employees should assume power to make substantive decisions;

iv. Employees should understand all the jobs, job specification and descriptions;

v. Management should create and maintain conducive organisational culture;

vi. Management should delegate authority and power;

vii. Management should encourage the employees to take risk;

viii. Management should reward the employees adequately;

ix. The environment should be receptive to people with innovative ideas, risk taking, new
methods and practices; and

x. Empowered employees should be accountable for the results, cost, behaviour, credibility
and positive approach.

Actions for Employee Empowerment:

i. To empower employees the organisation must initiate certain actions

ii. Delegation of authority

iii. Participative decision making

iv. Encourage self-management

v. Job enrichment

vi. Creating self-managed work teams

vii. Creating job that provide intrinsic feedback

viii. Installation of upward performance appraisal

ix. Lessening of formalities

x. Creating supportive culture

xi. Encouraging goal-setting

xii. Educating and training employees.

Employee Empowerment – Importance: Quality of Work Produced, Satisfied

Employees, Collaboration Grows, Productivity Increases and a Few More

Organisational restructuring/reorganisation through Business Process Re-engineering can be

possible only with employee empowerment. The liberalisation, globalisation and privatisation
resulted in severe competition. The competition forced the companies to serve and satisfy
mostly the customer.

Therefore, the organisations started empowering the employees to serve the customers better
without any loss of time and inconvenience of going around various departments like finance,
production and marketing/commercial. Empowerment enables the customer to get the better
service/products without the loss of any time and at one point of contact. Thus, the satisfied
customer will not only be loyal to the company but acts as a link in the chain of advertisements
without any cost.

The importance of empowering employees is clear when the benefits of doing so are
understood.

While there are many areas in which empowerment provides a positive impact, the
following five are perhaps the most recognizable:

1. Quality of work produced – When given the autonomy that allows them to make a difference
to product or service outcomes, employees will produce higher quality work. The finished
product becomes a matter of personal pride, and the benefits for both the customer and the
employee will become self-evident.

2. Satisfied employees – Various studies have shown that empowered employees are more
satisfied in their work, and less likely to seek employment elsewhere. This decreases
employment costs and the need for training of new staff.
3. Collaboration grows – With increased confidence; employees are more willing to share
information and best practices with others. Honesty and openness increase, and this directly
impacts the ability of people to work as part of a team. Participation becomes more active and
proactive, and this greater collaboration will in itself feed through to organizational capability
to achieve strategic goals.

4. Productivity increases – As confidence and self-esteem grows, and a more quality focused
and collaborative approach takes hold, productivity will increase.

5. Employee empowerment reduces costs – Costs will be reduced across the organization.

6. Highly Competitive Environment – Highly competitive environment makes it necessary for

companies to empower employees so that they are motivated.

7. Globalization – Globalization also necessitates empowerment to combat challenges of

globalization.

To sum up, an empowered workforce is more satisfied with their job and career path, and staff
turnover falls accordingly. Retention rates rise, training costs fall, and experience remains in-
house. Operations become more efficient and productivity rises. Solutions to customer
complaints are found proactively, and customer loyalty increases. This reduces the costs of
marketing and finding new customers.

Employee Empowerment – 10 Important Principles for Managing People in a Way that

Reinforces Employee Empowerment, Accomplishment and Contribution

Manager may look for principles to create a work environment in which people are
empowered, productive, contributing, and happy. There are some most important principles
for managing people in a way that reinforces employee empowerment, accomplishment, and
contribution. These management actions enable both the people who work with you and the
people who report to you to soar.

Principle # 1. Demonstrate that People are Valuable:

Regard for people must shine through in all of managers’ actions and words. Their facial
expression, body language, and words express what they are thinking about the people who
report to them. Their goal is to demonstrate appreciation for each person’s unique value. No
matter how an employee is performing on their current task, a manager’s value for the
employee as a human being should never falter and always be visible.
Principle # 2. Share Leadership Vision:

Help people feel that they are part of something bigger than themselves and their individual
job. Managers are suggested to do this by making sure they know and have access to the
organization’s overall mission, vision, and strategic plans.

Principle # 3. Share Goals and Direction:

Managers must attempt to share the most important goals and direction for their group. Where
possible, either make progress on goals measurable and observable, or ascertain that they
have shared their picture of a positive outcome with the people responsible for accomplishing
the results.

Principle # 4. Trust People:

Trust the intentions of people to do the right thing, make the right decision, and make choices
that, while may be not exactly what you would decide, still work.

Principle # 5. Provide Information for Decision Making:

Make certain that you have given people, or made sure that they have access to, all of the
information they need to make thoughtful decisions.

Principle # 6. Delegate Authority and Impact Opportunities, Not Just More Work:

It means that managers just do not delegate the drudge work; delegate some of the fun stuff,
too as well as delegate the important meetings, the committee memberships that influence
product development and decision making, and the projects that people and customers notice.
The employee will grow and develop new skills.

Principle # 7. Provide Frequent Feedback:

Provide frequent feedback so that people know how they are doing. Sometimes, the purpose
of feedback is reward and recognition. People deserve constructive feedback, too, so they can
continue to develop their knowledge and skills.

Principle # 8. Solve Problems- Do Not Pinpoint Problem People:

When a problem occurs, ask what is wrong with the work system that caused the people to
fail, not what is wrong with the people. Worst case response to problems? Seek to identify and
punish the guilty.
Principle # 9. Listen to Learn and Ask Questions to Provide Guidance:

Provide a space in which people will communicate by listening to them and asking them
questions. Guide by asking questions, not by telling grown up people what to do. People
generally know the right if they have the opportunity to produce them. When an employee
brings you a problem to solve, ask, “What do you think you should do to solve this problem?”
Or, ask, “What action steps do you recommend?” Employees can demonstrate what they know
and grow in the process.

Principle # 10. Help Employees Feel Rewarded and Recognized for Empowered Behaviour:

When employees feel under-compensated, under-titled for the responsibilities they take on,
under-noticed, under-praised, and under-appreciated, employee empowerment should not be
expected to produce results.

Employee Empowerment – Process: 5 Main Stages Involved

Empowerment is a complex process because of involvement of human beings whose nature

itself is quite complex. Being a process, empowerment involves a number of stages.

These stages are as follows:

Stage # 1. Recalling Depowering and Empowering Experiences:

Empowerment does not occur through rigid prescription by an organization; it evolves over
the period of time with experience. Therefore, there is a need for recalling events that show
depowering as well as empowering. While events showing empowering are reinforced, events
showing depowering need change through empowerment.

Stage # 2. Identifying Reasons for Lack of Empowerment:

After identifying the events that show lack of empowerment, it is required to identify the
reasons for lack of empowerment. Often, the reasons for lack of empowerment lie either in
organizational processes or in an employee himself or both. Various organizational processes
like delegation of authority, communication system, and control system may work against
empowerment. The reasons for lack of empowerment may lie here.

Similarly, reasons for lack of empowerment may lie with an employee depending on his locus
of control and self-esteem. Employees having internal locus of control tend to see
organizational processes as empowering unless these are in very bad shape while employees
having external locus of control tend to see organizational processes as depowering.

Besides locus of control, an employee’s self-esteem also affects his perception about
depowering and empowering events. Employees with high self-esteem tend to see
organizational processes as empowering while those with low self-esteem tend to see these
as depowering.

Stage # 3. Choosing One Issue/Problem/Project to Work on:

After identifying the reasons for lack of empowerment, concrete steps have to be taken for
overcoming lack of empowerment. At this stage, it is quite possible that there may be several
areas in which depowering events happen. However, all these areas cannot be covered in a
single step of empowerment.

Therefore, it is desirable to undertake one issue/problem/project at a time. The best strategy

to select an issue is to select that issue first which is easier to tackle. This may be followed by
more difficult issues in that order. The basic advantage of this strategy is that the organization
gets experience of empowerment action which can be applied in critical issues more
effectively.

Stage # 4. Identifying Potential Power Bases:

At this stage, potential power bases should be identified. Since power is capacity to influence
others, it can be acquired by an individual in different ways, known as power bases. Bases of
power may be of two types — positional and personal — with each type having different bases.

Positional power emerges from the position that an individual holds in an organization.
Personal power resides with a person regardless of his position in the organization. An
individual’s personal power emerges from his qualities that are unique. Potential power bases
may be identified in terms of these power bases.

Stage # 5. Developing and Implementing Action Plans:

After identifying potential power bases, the organization should initiate development and
implementation of action plans for empowerment. Empowerment exercise can be undertaken
either on individual basis or team basis. However, the present emphasis is on team
empowerment and creation of empowered teams. There are four ways of using power
irrespective of the bases from which it is derived.

These are:
(а) Increase in one’s power base.

(b) Enact power to make things happen through others.

(c) Challenge the power base of others.

(d) Increase the power base of others.

Since there are both organizational and personal bases of power, changes may be required
at both these levels. At the personal level, training and development activities can be
undertaken to enable employees to assume more power. At the organizational level, changes
can be brought in those organizational factors which are responsible for de-empowerment.

Employee Empowerment – Top 2 Methods: Job Enlargement and Job Enrichment

1. Job Enlargement:

It is a type of horizontal expansion which entails taking charge of more duties and
responsibilities at the same level. Job enlargement increases the scope of the job and reduces
level of specialization. Its aim is to reduce the monotony and repetition associated with a
particular job by introducing newer tasks.

It helps to create flexible workforces who are capable of performing a variety of jobs. One
negative aspect of job enlargement is that employees may be required to do more work at the
same pay scale. For example, a waiter at a small restaurant may be required to chop
vegetables or do the dishes along with his regular duty of taking orders and serving customers.

2. Job Enrichment:

Job enrichment entails increasing the depth of the job to include responsibilities that are
carried out at higher levels of the organization. It is vertical expansion of a job. Job enrichment
gives more control over the jobs by increasing the employees’ level of responsibility.

They are required to do more planning and organizing work. They are given more authority
and autonomy over their jobs. Job enrichment is also known as job enhancement. It requires
a higher level of knowledge, skills and challenging work. It motivates the employees and gives
opportunities for personal growth.

Job enrichment enhances the quality of work and provides a meaningful job experience.
Workers experience more job satisfaction as job enrichment brings more scope for
achievement, recognition, development and growth. If the responsibilities of a proofreader in
a publication are increased to include some level of editorial work, it would be an example of
job enrichment.

Employee Empowerment – Advantages and Disadvantages

Employee Empowerment is giving employees responsibility and authority to make decisions

regarding all aspects of product development or customer service.

Advantages of employee empowerment include:

1. Increased employee education and training;

2. Employees participate in creating their own goals;

3. Increased employee contribution;

4. Increased respect among employees secondary to teamwork;

5. Increased power equals lower absenteeism and better productivity;

6. Employees have more satisfying work;

7. An increased depth of competence among employees secondary to cross-training;

8. Less conflict with administration and managers; and

9. A few middle management positions mean decreased cost to the company.

Employees are more likely to agree with changes if they participate in decision making.

There needs to be a balance between empowerment and traditional management. The

manager of the department needs to be sensitive to the employees’ needs and the company’s
needs and to know how to use a management style that will work best to achieve desired
outcomes.

Empowerment benefits the organisation, employees and managers for organisation:

Empowerment benefits the organisation by–

i. Creating an environment which encourages proactively problem solving, accepting
challenge, innovation, continuous improvement, optimum utilization of employees

ii. A high degree of employee motivation and enhancement of business performance.

For Employees:

For employees empowerment provides a sense of high self-esteem, high degree of

involvement and participation, a learning environment opportunity for personal growth and
development and a greater sense of achievement.

For Managers:

Managers can think of empowerment process as involving in several stages. Managers can
assume additional and new responsibilities. The managers of the empowered organisations
will have greater commitment towards the organisation.

Some of the disadvantages of employee empowerment include:

1. Employees can abuse the increased power given to them;

2. It is too much responsibility for some employees;

3. Employees who focus on their own success rather than group’s may leave;

4. Managers must be better trained to facilitate through sharing of information, cooperation,

and referrals to appropriate resources; all employees must “buy in” to the concept for it to be
effective;

5. There is an increased cost to the organization for training and education;

6. There is increased time in groups or committees which takes away from regular jobs.

There may be increased conflict or power struggle between employees due to group work;
some employees may not be knowledgeable enough to make good business decisions;
decisions made on the basis of personality versus logical reasoning.

Employee Empowerment – 4 Major Challenges: Confusion, Improper Training,

Resistance to Change & Breakdown of Organizational Structure
Four major challenges faced by employee empowerment:

Challenge # 1. Confusion:

Employees are encouraged to think on their own and take their own decisions. But this may
cause confusion and chaos in organizations where employees are traditionally trained to take
orders from superiors. This can also give rise to disagreements among co-workers if they are
unable to take a unanimous decision.

Challenge # 2. Improper Training:

To enable employees to become accountable for themselves and take the best decisions it is
vital that they are given proper training. Each individual should be trained intensively to
develop his skills and talents so that he becomes a more productive and capable worker. But
in case employees are not properly trained, they would not be able to judge the situations well
and won’t be able to take good decisions for the company’s benefit.

Challenge # 3. Resistance to Change:

The people working in an organization can be resistant to changes and innovations in the work
place. Some managers may feel that their employees are not competent enough to take their
own decisions and be accountable for their work, while some employees themselves may not
want additional responsibility.

Empowering employees would also require some changes to be made in management style.
The managers would no longer be the ultimate authority. Thus, employees and managers may
be resistant to adopt changes.

Challenge # 4. Breakdown of Organizational Structure:

Employee empowerment can be conducted more successfully in a decentralized organization

with lesser hierarchical levels. This would require breaking down the existing structure and
eliminating redundant levels. This is not an easy process. Also it would make it more difficult
for the managers to control the employees once they have become used to their autonomy.

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THE PROS AND CONS OF EMPLOYEE EMPOWERMENT

There are both pros and cons of employee empowerment, and here we discuss the
advantages and disadvantages that are tangible and potential.

Forward Focus>>Inspire Leaders>>The Pros and Cons of Employee Empowerment

The Pros and Cons of Employee Empowerment

Is a culture of employee empowerment right for your organization?

Research published in the 2011 Journal of Applied Psychology (Antecedents and
consequences of psychological and team empowerment: a meta-analytical review – Siebert,
S.E; Wang, G; Courtright, S.H) provided a number of pressing reasons for organizations to
encourage employee empowerment. However, as with any organizational strategy there are
both pros and cons of employee empowerment. By understanding that there are two sides of
the coin when instigating an employee empowerment strategy, an organization will be better
positioned to maximize the advantages and minimize any disadvantages.

What is employee empowerment?

For an organization operating in the fast-paced, modern business environment, passing some
responsibilities to employees enables quicker decision-making at a lower level. At lower levels,
people generally have a closer and deeper understanding of many of the basic processes and
procedures that ‘get the job done’ and help the strategic vision of the organization to be
achieved. It would appear to make sense, therefore, to give people more autonomy in their
decision-making: in a word, empowerment.

The advantages of employee empowerment

There are several definite advantages of embedding a strategy and culture of employee
empowerment:

· Faster problem solving

First, because empowered employees are so close to issues and problems that require
resolution, response times should decrease. Faced with a problem, people who are close to
it have a natural affinity for it, and a definitive reason to find solutions rapidly – it aids their
work, making their time easier and more productive.
Executives are often detached from the shop floor, and lack the depth of knowledge required
in the solution-finding process.

· Increased morale and productivity

People who are given the autonomy to make their own decisions feel trusted and that their
contributions are a direct factor in their company’s success. This is a direct determinant of
employee morale. For example, 91% of Google’s employees say that they carry meaningful
responsibilities within the organization: for six years running Google has been ranked by
Fortune as the best company to work for.
Empowered employees working without continual oversight from a manager or supervisor
tend to feel more respected. Artificial obstacles to progress of tasks are removed when
employees no longer need their supervisor’s approval to move from one stage to the next.
This helps productivity, and profitability per employee improves accordingly.
Additionally, people own the responsibility given to them, and the manager/employee
relationship benefits accordingly.

· Greater involvement leads to greater commitment

With the greater involvement engendered by their increased responsibility, employees
become more involved in organizational strategy. They begin to look at colleagues and
customers differently, and their commitment to the company and its future grows. Satisfied
employees lead to satisfied customers. Such commitment also leads to decreased staff
turnover and reduced costs of hiring and training.

· Lower levels of management stress

When employees are empowered with responsibility, managers become freed to concentrate
on strategy and the bigger picture. Instead of becoming enmeshed with day-to-day decision-
making, managers can concentrate on strategic objectives, project planning, professional
development, and customer-centric activities.
Empowering employees invigorates leadership by removing the stress of day-to-day
management responsibilities.

The disadvantages of employee empowerment

· Lack of experience increases risk

While the handing down of responsibility promises to improve speed, agility and productivity,
a concern is that decisions are now being made by less experienced and less expert
personnel. This can increase the number of mistakes made and put reputation at risk.
The risk of work practices falling into chaos must be tackled by proper training, and by ensuring
that supervisors maintain organizational standards. These standards must incorporate an
organization’s values and beliefs: care must be taken that employees do not work in
accordance with individual values that may be divergent to the corporate mission and vision.

· Potential for decreased efficiency

When people are given the autonomy to make their own decisions, those decisions cease to
be uniform. This lack of coordination can lead to problems down the line.
It is also the case that autonomous employees may decide to work slower on days when they
feel distracted or lack the energy to forge ahead. Where some workers are performing more
productively than others, without being rewarded for doing so, internal friction can increase. If
not dealt with, this can cause confrontation or a spiral to the bottom as all workers decide to
work at the pace of the slowest and least productive team member.

· Blurred relationships
Empowerment inevitably leads to a flatter, more streamlined management structure. The risk
here is that professional relationships become blurred, and boundaries of authority become
broken. This might require greater control over employees, not less.
Accountability issues may arise, leading to a blame culture that, if left unchecked, will lead to
further discontent and an environment of mistrust. In such a situation, it is likely that employees
will decide to take less responsibility for fear of repercussions should things go wrong.

· Poor decision-making
If a team lacks the individuals with skills commensurate to the project, tasks, and work
required, decision-making will be poorer. This will be to the detriment of the organization, as
poor solutions lead to decreasing productivity and internal conflict.

The bottom line

Weighing up the pros and cons of employee empowerment, the potential benefits to
individuals, teams and the organization are clear and tangible. The potential drawbacks can
be controlled by good management techniques, including:

 Positive leadership
 Coaching, training, recognition, and rewards schemes
 An open and transparent communicative environment

Emotional intelligence among leaders is also associated with the ability to embed a more
empowered workforce, helping people to take the initiative and evaluate their own
performance.
If an empowerment strategy is well managed, your people will become partners in your
success. They will become a transformative force that will jumpstart change and ensure the
goals of your strategic vision are accomplished.
In our next article, we’ll examine five ways in which to encourage employee empowerment.

About the Author

Beth Williams

President and Owner

Beth Williams brings 25+ years of sales, marketing, management and Human /Organizational
development experience to her role as President of Forward Focus. She started her corporate
career in the world of advertising and publishing before she founded Forward Focus in the
year 2000. Learn more about Beth.

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