Summary of the key issues
The research article written by Kevin Baird and Haiyin Wang (2010) has been aimed at determining the extent to which employee empowerment is promoted In Australian companies, in particular in manufacturing business units. The researchers examine the influence of various organizational and cultural factors on the degree of employee empowerment. For example, they discuss such factors as business unit size, rewards, training, openness to innovation, or teamwork (Baird & Wang, 2010, p, 574).
It should be noted that this study focuses on such activities of workers as identification of problems that should be resolved, the design and evaluation of different alternatives, decision-making, and implementation of these decisions (Baird & Wang, 2010, p. 599). A worker, who feels empowered, is able and willing to cope with such tasks. Moreover, the authors distinguish various dimensions of empowerment, in particular, the degree of workers’ influence on managerial decisions, the rules which enable them to participate in decision-making, and the degree of collaboration between frontline personnel and managers.
The findings of this research indicate at several important problems. First, they show that in many Australian companies cooperate usually when it is necessary to identify problems, but they do not always take initiatives at the stage when alternatives are evaluated and decisions are made (Baird & Wang, 2010, p. 582).In other words, their opinion is not often valued or considered by the managers. Thus, the extent of their empowerment is rather moderate.
Moreover, in many companies there are very few institutional rules that enable or require employees to take part in identification of organizational problems, designing alternatives, or implementation of solutions (Baird & Wang, 2010, p. 582). Kevin Baird and Haiyin Wang believe that this phenomenon can be explained by cultural factors and organizational factors (2010, p. 582). For instance, the companies that encourage and accept innovation are more likely to encourage the autonomy of their employees (Baird & Wang, 2010, p. 588). Yet, very often frontline employees have little or no experience of participating in the decision-making. The degree of empowerment in an organization also depends upon the compensation system used by managers.
Baird and Wang argue that the employees are more willing to take initiative if this initiative is recognized and rewarded by the managers (2010, p. 578). They expect their initiatives to be recognized and rewarded by the company, for example, in the form of monetary bonuses or promotion. Unfortunately, in many cases, organizations do not provide sufficient incentives to the employees. Sometimes workers do not even receive recognition for their initiatives and solutions that they propose. This is another reason why many companies become stagnant and do not achieve the results that they can achieve.
Overall, this study suggests that the level of empowerment in many organizations is not sufficient, and these companies cannot receive various benefits that empowerment brings. For instance, one can mention better flow of information, improved problem solving, and increased satisfactions of employees. Furthermore, lack of empowerment leads to increased employee turnover and lack of motivation (Cascio & Boudreau, 2010, p. 80). So, it is necessary to develop strategies for resolving this problem and ensuring that workers can affect the development of a company by offering innovative solutions. The main areas that managers should focus are performance appraisal, rewards, and organizational rules that can make employee empowerment a part of a company’s culture.
The first thing to do is to create mechanisms that allow workers to take part in the discussion of workplace problems, assessment of different options, and implementation of decisions. There should be procedural norms that promote empowerment of the employees. The organizations can take different actions in order to achieve this goal. One of the strategies is to establish quality circles or discussion groups in which frontline employees and managers can discuss products, production processes, or work environment (Bonstingl, 2001, p. 17). These discussion groups can be attended by people who occupy different positions in the workplace hierarchy.
Such meetings should be made obligatory for both frontline employees and managers. Together they can better identify the issues that should be addressed, find solutions and develop strategies for implementing their plans. By establishing such discussion groups, companies can promote employee empowerment and reduce the power distance between frontline employees and top managers. This is the first step that businesses should take to promote the empowerment of workers. Later the management can give more autonomy to workers and allow them to take some decisions independently without having to ask the top-executives for permission. This should be the ultimate goal of employee empowerment.
The second recommendation is to implement a performance assessment system that recognizes the individual contribution of every employee. As it has been said before, the rewards are a powerful stimulus affecting the extent of empowerment. However, at first it is necessary to identify or recognize the initiatives that an employee takes. In many cases, they can be overlooked. One of the methods that can help management with this task is 360-degree assessment. In this case, the performance of an individual will be assessed by peers, managers and subordinates who better evaluate a person’s work in a team or the ideas that he or she proposes (Shaver, 1998, p. 7).
Therefore, the management will better evaluate the effort that each worker takes. Thus, one of the first tasks that HR managers should do is to adopt or develop a good performance appraisal system. Certainly, 360-degree assessment is not the only option available to them, and they may use different performance appraisal methods. Yet, in every case, they should evaluate different aspects of a person’s performance, for example, ability to identify problems, participation in decision-making and independence (Shaver, 1998, p. 7). These aspects of performance should be taken into account by HR managers because they can be more important than only quantitative results such as the volume of production or sales rates.
HR professionals should remember that even very talented workers may eventually lose any interest in taking initiatives if the management overlooks the effort that he or she takes. So, it is necessary to design and implement a performance appraisal system that will minimize the risk of unjust or superficial assessment. Thus, one can argue that HR managers will play an important part in promoting employee empowerment. Their actions can either increase or decrease the competitive strength of a company.
Secondly, organizations should determine how the employees should be rewarded for their initiatives. Rewards are probably the most important factor that influences the extent of empowerment. In this regard one can mention such notion as total rewards; it means that the worker’s compensation should not include only quantitative or transactional rewards such as pay or monetary bonuses (Armstrong, 2010, p. 40).
This compensation also has to encompass relational rewards such as career opportunities, professional training, or more flexible schedule (Armstrong, 2010, p. 40). These relational rewards can be also valued by employees. They show that a company does appreciate workers, and this experience can be a very good stimulus (Armstrong & Cummins, 2011, p. 47). HR professionals and executives need to combine both these approaches to encourage taking initiatives and independent decision-making.
On the whole, total rewards policy can take different forms. First of all, one can speak about relations rewards. In particular, managers should give more autonomy to the employees who successfully offered and implemented solutions to a particular problem that organization faced. Trust can be viewed as a form of relational reward and it provide an extra stimulus to the workers.
Secondly, such workers should be able to take part in training programs that can help them achiever professional growth and eventually qualify for managerial positions (Armstrong & Cummins, 2011, p. 47). This opportunity can be appreciated by workers who want to continue their education and acquire new skills. Additionally, the employees, who consistently take part in decision-making and offer good solutions, should be promoted. It is quite possible that they will be able to cope with the responsibilities of managers.
The main point of such rewards is to show that a company values a worker and the effort that he or she takes. Even though this compensation is non-monetary, it makes the work much more fulfilling and rewarding. Therefore, HR managers should determine how non-monetary or relational rewards should be paid. In this way, they can stimulate employees and eventually contribute to the growth of a company or at least its improved performance.
Apart from that, HR managers should remember about financial compensation that should be given to workers who identified or resolved a particular problem. These people can be offered the shares of the company, cash bonuses, or extra days of paid vacation (Armstrong & Cummins, 2011, p. 47). In some cases, pay raise can also be a good option. Additionally, companies that prefer monetary compensation can reward employees with the stocks of the company.
In this way, the management can make employees interested in the long-term success of the organization (Lussier, 2011, p. 106). Skillful and initiative workers will see that the performance of a company can affect their personal income. Moreover, the problems and deficiencies within the organization will be of greater importance for them. This is how organizations can use transactional or monetary rewards in order to incentivize workers.
These strategies may increase running expenses of a company, but they can make workers more motivated. On the whole, total rewards model has been widely adopted by many companies throughout the world. Leading companies attempt to combine both monetary and non-monetary rewards in order to motivate employees. Thus, top management and HR professionals will determine how total rewards should be distributed among the employees of the company.
These monetary rewards should be merit-based. In other words, a worker should be rewarded for the contribution that he or she makes, rather than the position that this person occupies in the company. If this requirement is not met, the workers will thing that rewards are mostly intended mostly for top executives, and they may eventually lose trust in the company and its policies. This is the danger that managers should be aware of because trust is one of the factors that facilitates employee empowerment.
Finally, companies should pay more attention to their organizational culture, especially power distance between employees. In many businesses, frontline personnel do not have the opportunity to communicate with top managers. Moreover, their initiatives are sometimes not welcomed because top-managers do not want their authority to be challenged. This attitude may become the main obstacle for promoting the empowerment of employees.
These managers should remember that the most successful companies are those ones in which employees can communicate with top executives and discuss business processes, goals of an organization, its operations, and so forth. Overall, these recommendations can be effectively implemented only if HR practitioners and managers join their effort. They will be responsible for carrying out organizational changes that have been proposed. To some degree, long-term competitiveness of a company may depend on their actions. The recommendations offered in this section can benefit companies that may have different goals or represent different industries.
Rationale for recommendations
The strategies that have been recommended may have significant impacts on a company, and many executives may be reluctant to accept such changes. Thus it is necessary to explain why these changes should be implemented. First of all, it can be argued that many businesses cannot afford to provide extra compensation to every employee each time when he or she identifies a problem and gives a good solution. Thus, one can assume that these recommendations may not be cost-efficient.
However, one should take into account that companies often have to spend much more money only because they cannot make their employees engaged and loyal to the company. For instance, they have to cope with the effects of employee turnover and the necessity to look for skilled workers (Cascio & Boudreau, 2010, p. 80). A company that constantly has to recruit and hire new employees can lose both time and money because every new hire needs time to adjust to the company’s performance standards, business processes, and workplace hierarchy. As a result the productivity of this person is not very high at least at the very beginning. Total reward strategy can offer a solution to the problem of high turnover. In the long term, its benefits can outweigh its costs. This is the main issue business administrators and HR practitioners should take into consideration.
Furthermore, total rewards cannot be reduced only to financial compensation. As it has been noted before, companies can offer care opportunities to workers and allow them to improve their professional skills. Managers should not assume that by giving these rewards, a company will dramatically increase its operating costs. The key point is that very often mere recognition of a person’s success can be encouraging and one can hardly say that such recognition will require significant expenses (Armstrong, 2010, p. 40). These practices are currently adopted by large international companies such Microsoft or Google (Graham, Roth, & Dugan, 2008, p. 380). Yet, they have also benefited many small companies and made them more competitive. This is why the proposed recommendations may be implemented by various companies.
Secondly, it has been argued that 360-degree assessment should be adopted. Such performance appraisal system may not be accepted by some people who do not want to be evaluated by their peers or subordinates. In their opinion, such form of evaluation may undermine their authority and ability to influence other people. Moreover, one should mention that peers and subordinates can be biased in their assessment (Shaver, 1998, p. 7). Certainly this risk does exist; however, it is much higher when only one person is responsible for the assessment of workers.
Overall, this approach is more suitable for the evaluation of an individual’s work. The problem is that very often the performance is assessed by quantitative methods. For instance, some managers take into account only the number of units that a worker produced. However, very often they disregard the problems a worker was able to solve or successful decisions that he or she took. 360-degree feedback is a method that can make performance assessment more objective.
Moreover, by taking this approach, a company can demonstrate that the opinions of employees are valued by the management. Moreover, they will be more willing to accept the results of the performance appraisal knowing that they also took part in this assessment. This is the main rationale for adopting 360-degree feedback or any other performance appraisal method that includes both managers and frontline employees. Managers should not look only at the outcomes of a performance, but also at the steps are needed to achieve these outcomes. This is the main reason why modern businesses should look beyond quantitative measurement of performance.
Finally, it has been suggested that companies should establish quality circles or discussion groups. The opponents of this approach may say that decision-making process within a company can become more time-consuming. Certainly, such a limitation cannot be overlooked, but the main advantage of establishing quality circles or discussion groups is that the same decision or problems can be viewed from different perspectives (Bonstingl, 2001, p. 17). For example, the management can ask workers how production process can be improved or how supply chain can be optimized. These are the questions that are relevant to many companies, and they can be better examined when they are discussed by frontline personnel and managers.
In order to do it the companies will need to change their organizational structure and make it more flat. In other words, the employees should be able to communicate with top executives and discuss organizational issues with them. They should not be afraid of asking them questions or critiquing managers at least when they see that managerial decisions can and should be improved. One can argue that such a change will be costly and time-consuming because a company, especially a large one, will need much time in order to adjust to these changes.
However, in the future, flat structure of a company can make this organization more agile and responsive to various challenges, either internal or external. Thus, the change in organizational culture is not some kind of luxury, but a necessity that is important for sustainability of the company. Overall, this discussion suggests that HR managers will play a critical role in changing organizational culture, developing performance methods, and determining the distribution of rewards.
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