Impact of employee empowerment on organizational performance.

Introduction 

In the past business, organizations function on the sole discretion and decision making by the owners themselves. The employees of the organization had no power to be partners in the decision-making process. In progress with time global business environment has changed immensely. Business organizations that are involved in international trading have begun to change their business strategy to be successful by satisfying the customer's demand and meeting the required standard of service and quality of the product. In this context on-time delivery to the customer and the satisfactory service provided place a vital role to retain the existing customers and attract new customers. The modern business environment has therefore changed its management strategies in the decision-making process to involve the employees of the organization to achieve success in its decision. This process of involving employees has brought in empowerment factors in the employee.

Employee Empowerment is an important factor in modern business management. A strong term that is being used in the latest management styles. Its phycological term defines the technique used to create ownership of an employee to perform the job at his best with independent decision-making authority. The objective of empowering employees is to develop a more productive, contributing self-motivated, and happy employee base within the organization (kasanoff, 2016)

History of empowerment from master and servant to employer and employee (Transformation)

Master and Servant relationship can be defined as an ancient mode of relationship between employment provider and employee (Capital Vs Labor) 

Master and Servant relationship existed till the 2nd world war globally even in an America and Europe. In Asian counties during the colonial governance, the same pattern existed. After the 2nd world war, most of the countries in the Asian region became independent nations and it brought a new face to international trade and development in management styles. Very specifically human resources development became a powerful tool in business management.

 Prerequisites for employee empowerment 

For any organization to be successful in employee empowerment should consider the following factors. One should bear in mind employee empowerment is not a static exercise (It’s a continuous journey). In progress with time changes in lifestyles, culture business environment, and Political environment, the empowerment structure will also change. The defined journey can be a cultural change including the mindset changing of the top management towards the employee.  As the author mentioned the company should follow the below actions. (Anjali, 2018)

1. Management trust and support - Management trust and support will not happen at once – It should be proven by the management by action (Healthy relationship).

Example:  Factory improvement team, Worker’s meeting, Joining consultative committees, Training, and Development 

2. Open communication (Open door policies) - No communication gap between organization and employee, In this case very strong visual display method is essential. Room for the free idea is true.

Examples: Grievance handling, Skip meetings, Complaints and suggestions, Kaizens. GPTW survey 

3. Employee engagement                 - The workforce should be involved or be a part of achieving company goals and targets.

Examples: Event organizing, CSR project 

4. Decision-making ability                - Right decision at the right time

Examples: Monthly Kaizen projects, Problem-solving circle, 

5. Group reward system                   – Appreciation & recognition for performance should be in place

Examples: Bonus system, Incentive scheme, Salary increment, Appreciations, Promotions

6. Error tolerance and reflection   – Learning from mistake culture

Examples: Training and Developments, coaching, soft skill development 

7. 360-degree feedback session   – Establish a performance review in 360 angles from a supervisor, subordinate, and peers, Management should do evaluations periodically to assess the success of the journey.

Examples: Mid-year review, End year Review, One on One discussion 

Impact on organizational performance through employee empowerment 

Empowerment influences self-motivation and creates a high morale work environment. Since the empowered employees are self-directed and motivated and do not wait till the instruction or orders come to them for action. They are well organized and keen to leverage their full potential to achieve goals.  Employees in an organization where empowerment is highly active deliver more productivity and job satisfaction. (Allan Lee, 2018)

Empowering management increase the trust between employer and employee thus employee has more confident capabilities so that they achieve more which Results in more benefits of employee empowerment to the organization. As the author says, “Empowerment is the best way to promote a good long-lasting employee-customer relationship” (Fragoso, 1999)

                                                                  Figure 1.1

(technofunc, 2020)  

The diagram (figure 1.1) which is shown above describes the relationship between empowerment Vs benefits. It’s a theory that benefits go to both organizations as well as employees.  

Live Example: 

1. Netflix: 

Netflix is one of the best companies which has a rapid success story of employee empowerment. Regardless of the role of the employee plays, given a high level of autonomy and independence for achieving excellent results with taking responsibilities. Top management trusts the employee, and the employee tries their best to be productive. The freedom of the employee makes innovative ideas which help to achieve high performance.  (Shah, 2021)

Netflix Performance last 2016 to 2020

                                        Figure 1.2

(Richter, 2021)

2. TOYOTA 

TOYOTA is a multinational car manufacturing company which lead by employee empowerment. It's famous for continuing to improve the manufacturing process an approach that effectively engaged front-line workers in improving the working process. The top management always encourages front-line workers to suggest ideas (Kaizen) to do local improvements. Management established a relationship of mutual trust and respect for each other, which is a critical factor in empowerment. All the workers have the freedom to raise their idea for work-life improvement and all the time, ideas are most welcome by the top management 

(power, 2011)

In generally 

• 430,000 Kaizens are implemented per year in TOYOTA, (Graban, Nov 23, 2019)

It implies that the employees are self-motivated and have trust in the top management through employee empowerment. 

3. Brandix (Pvt)Ltd, 

 Brandix is a multinational apparel manufacturing organization based in Sri Lanka and has branches in India, Bangladesh, and Haiti. Brandix follows R.I.T.E values as employee empowerment. (R-Respect, I- Integrity, T-Team work, E-Excellence)

In Brandix, Value respect for each other has been established thus mutual understanding among the employee and employer is increased. lower line workers raise the idea without any fear. the decisions are taken by the management are visual and no gap between practices and words, hence the integrity within the team has more strength. Management supports the lower line workers to do the job productively. Operation digitalization is a good example of empowering employees. Brandix focuses on operational excellence to inspire the customer by giving perfect solutions. 

Example: (Brandix, 2018)

• CSR project (Bindu – facilitate to an employee who does not have water)

• Training and Development – P.A.C.E program (Develop soft skill development training)

• Overseas training/Management development training (MDP) 

• Employee engagement – Rasadiya hiru (It’s a great festival that the management offers to the employee to perform their own talent and appreciate by giving prices)

 

References:

• Anjali, J. (2018) Employee Empowerment.[online] Available at: https://theinvestorsbook.com/employee-empowerment.html

(Accessed on 1st of April 2022)

• Udoagwu, K. (2021) ‘Everything You Need to Know About Employee Empowerment’, Wrike, November 10,  Available at: https://www.wrike.com/blog/everything-to-know-about-employee-empowerment/#What-is-employee-empowerment

(Accessed on 05th of April 2022)

• Technofunk, (2020) Benefits of Empowerment Available at: https://www.technofunc.com/index.php/leadership-skills-2/team-leadership/item/benefits-of-empowerment

Accessed: 29th of March 2022

 

• Murari, K, and Gupta, K. (2012), 28-37 Impact of Servant Leadership on Employee Empowerment,[Online] Available at: https://www.proquest.com/openview/998a3ab647a31a88ec5fb2211b8f9551/1?pq-origsite=gscholar&cbl=2030931

Accessed: 06th of April 2022

 

• Kasanoff, B. (2016) 10 Powerful Ways To Empower Your Employees.[online] Available at: https://www.forbes.com/sites/brucekasanoff/2016/03/24/10-powerful-ways-to-empower-your-employees/#6cc4f0977427 

Accessed: 3rd of April 2022

 

• HEATHFIELD, S.M. (2019) How to Empower Your Employees.[online] Available at: https://www.thebalancecareers.com/empowerment-in-action-how-to-empower-your-employees-1918102

Accessed: 4th of April 2022

 

• Lee, A, et.al. (2018) When Empowering Employees Works, and When It Doesn't.[online] Available at: https://hbr.org/2018/03/when-empowering-employees-works-and-when-it-doesnt

Accessed: 28th of March 2022

 

• Shah, R. (2021) ‘Employee Empowerment the Netflix Way’, short form, Jan 23.[online]. Available at: https://www.shortform.com/blog/employee-empowerment/

Accessed: 08th of April  2022