ABSTRACT
Empowerment has been in the forefront of quality improvement efforts. Presented will be an overview of employee empowerment, the enlargement of employee jobs giving them the responsibility and ``authority to make decisions about their work without supervisory approval'' while still creating value for the customer(Boone & Kurtz 1998). The do's and don'ts of this two-edged sword will be evaluated. Many companies have faltered by not supporting empowerment with an appropriate facilitating infrastructure. A discussion will focus on these caveats. Finally, some successful and unsuccessful implementations of employee empowerment and their outcomes will be presented.
This project will consider an overview of employee empowerment. It will define it in more details and address its benefits - when correctly implemented - and the needs to promote these benefits; it will show when empowerment does not work; the studies conducted about it; and some examples of companies that have implemented Employee Empowerment.
Several businesses worldwide have been and still are currently closely watching quality - the ability to produce superior and distinguished goods and services to meet customer needs. The commitment to quality today is very present in service industries, non-profit organizations, government agencies, and educational institutions (Boone & Kurtz 1998). Total Quality, also known as Total Quality Management (TQM), is seen differently by different people. Chief Executive Officers, vice-presidents, managers, supervisors and employees from several distinct companies, areas, and departments see TQM positively or negatively as a good or evil device to be implemented. The quality movement started in the U.S. during the 1920's to try to improve manufacturing processes, thereby improving the quality of final products. This new method wanted to construct quality outputs from the beginning right at the production process, instead of having inspectors to sort out the defective products at the end of the production line. Dr. W. Edward Deming helped spread this quality control technique in the U.S. and abroad, later developing the 14 Points for Quality Improvement which serve today as the foundation of TQM (Boone & Kurtz 1998). TQM can be specified as the ``never-ending process of continuous improvement that covers people, equipment, suppliers, materials and procedures...so that every aspect of an operation can be improved...and the end goal is perfection, which is never achieved but always sought''(Heizer & Render 1999). The Japanese even further matured the TQM concept right after WW II in an attempt to rebuild its industrial base. Hundreds of Japanese firms such as Honda, Toshiba, Nippon Steel, and Hitachi armed themselves with practices of TQM (Boone & Kurtz 1998). During the 1960's and 1970's the Japanese evolved another idea from TQM's concept, the so-called quality circles (QCs, or quality control circles). The idea behind QCs was and still is to have a group of employees from the same work area or department meet usually before or after work, to identify, discuss and solve problems normally concerning production quality. QCs also became popular in the U.S. during the 1980's, and it was introduced as a fascinating and unusual Japanese management methodology (Sashkin & Kiser 1993). TQM can be finally described as ``a philosophy of management that is driven by the constant attainment of customer satisfaction through the continuous improvement of all organizational processes''; accurate measurements; and employee empowerment, while still keeping the costs down and maintaining a profit (Robbins 1996). Employee empowerment and its aspects will be the facet discussed and the main focus and development of this paper. The essence of Empowerment can be described as the enlargement of employees' jobs giving them the responsibility and ``authority to make decisions about their work without supervisory approval'' while creating value for the ultimate customers (Boone & Kurtz 1998).
Effective bosses worldwide now are called ``coaches, advisers, sponsors, or facilitators.'' Good managers and good ``coaches'' are expected to help employees refine their job achievements by encouraging, instructing, guiding and giving them advice. The power that managers have - the capacity that managers have to influence the behavior of employees - and work responsibilities, must be now shared with employees through the creation of trust, assurance, motivation, and support. Work-related decisions and full control of the work is being pushed down towards the lowest operating levels (Robbins 1996). Self-conducted teams have also emerged, which are groups of empowered employees with no or very little supervision. These groups are able to solve work problems, make choices on schedules and operations, learn to do other employees' jobs, and are also held accountable and responsible for the quality of their outputs (Boone & Kurtz 1998). Dr. W. Edwards Deming, a statistician, quality expert and one of the leaders in the fight for quality, pointed out that to improve quality, the production processes were to be controlled as they were happening instead of corrected later. He then concluded that the best people to perform such control were the workers themselves. The only problem was that the average workers did not have freedom or necessary skills to do so (Sashkin & Kiser 1993). Rarely a problem turns out to be the employee's fault. The causes can normally be tracked back to incorrect product or system designs, or even to inappropriate training received by the employees (Heizer & Render 1999).
Employee empowerment can be a powerful tool. This ``new'' form of administration challenges the hierarchical forms of leadership where the final authority was at the top of the tower watching the working mass (Bourke 1998). The now advanced leadership style can increase efficiency and effectiveness inside an organization (Eylon & Herman 1999). It increases productivity and reduces overhead. Overhead expenses are those needed for carrying on a business, i.e. salaries, rent, heat and advertising (Clark 1999). It gives managers the freedom to dedicate their time to more important matters. Managers can highlight the talents and efforts of all employees. The leader and organization take advantage of the shared knowledge of workers (Hatten 1997). Managers at the same time develop their own job qualifications and skills attaining personal advancements (Eylon & Herman 1999). Empowered employees can make decisions and suggestions that will down the line improve service and support, saving money, time and disputes between companies and their customers (Sitterly 1998). Empowerment of qualified employees will provide exceptional customer service in several competitive markets, therefore it will improve profits through repeated business (Potochny 1998). Customers prefer to deal with employees that have the power to manage arrangements and objections by themselves, without having to frequently inquire of their supervisors (Boone & Kurtz 1998). Customers want their needs met without having to pass through ``layers of approvals, referrals or excuses''... they want ``on-the-spot'' decisions; they want to hear what can be done instead of what cannot (Sitterly 1998). Empowerment is a strong tool that will increase ``revenue and improve the bottom line'' (Potochny 1998). The U.S. Labor Department stated that empowered employees are more likely to produce higher profits for their organizations than non-empowered ones (Boone & Kurtz 1998). Empowerment is also the best way to promote a good long-lasting employee-customer relationship (Potochny 1998).Empowerment also brings benefits to employees. It makes them feel better about their inputs to the company, it promotes a greater productivity, and provides them with a sense of personal and professional balance (Bourke 1998). It exercises employees' minds to find alternative and better ways to execute their jobs (Boone & Kurtz 1998), and it increases their potential for promotions and job satisfaction. It results in personal growth since the whole process enlarges their feelings of confidence and control in themselves and their companies (Eylon & Herman 1999). It is a process that makes workers utilize their full potentials. This enables them to stay behind their decisions, assume risks, participate and take actions. It is a win-win-win situation: customers benefit from sharp employees; organizations benefit from satisfied customers and sharp employees; and employees benefit from improving their confidence and self-esteems (Sitterly 1998).
Benefits come with changes in the organization's culture itself. Benefits require changes in management and employees (Sitterly 1998). For empowerment to succeed, the ``management pyramid'' must be inverted. Old-fashioned managers must step off their ``pedestals'' and for the first time serve their subordinates and give up control. Old-fashioned employees must also agree to changes. They could see empowerment as a threat, especially if they became use to the convenient old style of management structure where the rules and decisions came always from above (Clark 1999). Managers are learning to give up control and employees are learning how to be responsible for the actions and decisions (Robbins 1996). In sum, it is fundamental that management share information, create autonomy and feedback, and train and create self-directed teams for empowerment to work properly. Managers often prefer not to communicate with employees, and not to share some extremely important information with them (Potochny 1998), but an effective leader must have no hidden agendas. They must treat employees as stakeholders for the road of success (Bourke 1998). Employees must have a clear vision of success, because if they are not aware of what success means to the company and where the company is heading, there is no way they can feel empowered to help accomplish this success (MIR 1999). Managers should teach the basics of cost and revenue to employees. They should open their financial books and inform employees of the situation so they can feel more related to the company (Potochny 1998). ``To empower means to entrust,'' it is much more than just telling employees they must create answers and be responsible for those answers, ``that's passing the buck'' (Clark 1999).
Autonomy and feedback evaluations must also be created to achieve correct empowerment. Autonomy is seen as allowing people ``absolute freedom'' to finish the job when an exceptional situation occurs. It is to let employees decide how to handle clients and give them discretionary power when deciding what to spend in order to mend a certain problem (Hocutt & Stone 1998). Individual and group feedback is the base for employee autonomy to work effectively towards a beneficial empowerment. Feedback improves the ability of making decisions. It can provide employee evaluations through the exchange of information where the company's missions and goals are stated. With feedback, managers can show employees how far they can go to satisfy a customer and how much they can exceed their expectations. For autonomy to work, management must equip employees with the correct special tools to provide them the necessary and specific guidelines on how to act during certain issues and to make certain decisions (Potochny 1998). These special tools could come through inside and/or outside company training, which is a good way to provide for appropriate decisions. It can set fair limits, can improve quality service and refine behaviors, it can increase customer satisfaction, and it can teach how to deal with irritated customers. Training can build employee confidence on how to decide the best way to manipulate failure circumstances (Hocutt & Stone 1998). Hierarchy must be replaced with self-directed teams that must be assembled accurately. They are groups no larger than five or six people who are assigned a specific problem to be solved from their area of expertise (Clark 1999). An enthusiastic, self-directed and work-loving team leader, who is willing to be held accountable for the decisions, should be also selected (Potochny 1998). The problems to be addressed by the teams could be anything from diminishing defect products, excess inventories and shipping costs, to increasing production volume and promotion capital. Teams are given boundaries and constraints such as staffing, equipment, time, locations and budgets to operate under. They are to recommend a solution and, as long as it is under the pre-established limits, it is to be implemented and supported by upper management. Group decisions, implementations and commitments must be backed by management and supported by them at all times, even if group decisions were proved ineffective afterwards. No blame is to be assigned and no fingers are to be pointed. A mistake should be viewed as a learning tool (Clark 1999). Employees should not be afraid to take risks when within their areas of discretion. They should feel they are part of the organization and part of a team of coworkers who can work together to resolve issues and who respect and appreciate teamwork (MIR 1999).
Empowerment must be carefully planned and implemented so as not to lose its focus of value creation for the customer. It can be a victim of the very problems that made it desirable in the beginning (Dover 1999). Some of the internal and external threats encountered to a successful achievement of empowerment are briefly described below:
Conflicts may emerge between employees and managers when defining power. The decision-making authority expected by employees might not be the same one managers are willing to accept. Employees could stop the efforts, lose interest and become cynical.
Managers might not be willing to give up the necessary power. They can oppose empowerment because they can see it as a loss of authority and less job satisfaction.
Employees might resist empowerment. Some may not be comfortable with taking new responsibilities. They prefer to depend on the decisions of others. They might refuse to ``get with the program.''
Managers might assume that employees already have the required skills to start a good empowerment program. To fully train employees to be able to make their own decisions could be time consuming and expensive, which could be considered large barriers to fast success.
Impatience will also not help. The efforts could take long to show results and could burn up important resources.
Reductions in the workforce. Sometimes economic and competitive environments call for a labor force cutback. This could then be used as an excuse not to implement empowerment.
Changing senior management. Empowerment efforts could be injured if any new senior manager is about to take office. Even though everything might be running smoothly, new senior leaders have a tendency to move things around.
Mergers and acquisitions. These types of company ``mixtures'' can always threat empowerment. Both organizations will not always come to the integration process with the same degrees of programs implemented. A lot of changes can take place to make a uniform empowerment process (Dover 1999).
Research done in England by John P. Carlos, a Phoenix-based management and employee-training consultant and co-author of the book ``Empowerment Takes More Than a Minute,'' found a great significance that the English put on confidentiality. To share information was seen as unnecessary (Schrecengost 1996). Empowerment then would probably not be a big hit amongst English companies.
A.T. Kearney, a Chicago-based global management consulting firm, studied 100 British firms and demonstrated that only one-fifth of them thought that positive outcomes were due to a TQM program (Korukonda, et al. 1999).
Research conducted by Lawler, Mohrman, and Ledford, authors of the book ``Employee involvement and total quality management: Practices and results in Fortune 1000 companies,'' in 1992, showed that 84% of Fortune 1000 companies studied had employee empowerment programs (Fortune Magazine's top 1000 companies are divided into sixty-one industry groups and ranked by revenues according to this magazine's classic list). It even showed that these organizations had reached great success through the implementation of TQM and employee empowerment at once (Korukonda, et al. 1999).
Arthur D. Little, a Cambridge-based international management consulting firm, surveyed 500 manufacturing and service companies and found that two-thirds of them were not satisfied with TQM programs in their organizations. Only one-third responded that TQM was greatly impacting their competitive advantages (Korukonda, et al. 1999).
Studies of Malcolm Baldrige National Quality Award (highest quality award that a U.S. company can receive, established in 1987 by the U. S. Congress, and named after former Secretary of Commerce Malcolm Baldrige to recognize excellence in quality achievements) winners showed that they achieved this position due to senior management's commitment to training, empowering, and involving all employees with the goals to reach quality values (Boone & Kurtz 1998).
As mentioned earlier in this paper, the U.S. Labor Department made a report with its findings that empowered employees have better chances to produce higher profits for their organizations than non-empowered ones (Boone & Kurtz 1998).
Research conducted by Northwood University professors, Fred Jordan (Associate Professor and Chair of Business Management) and Tim Gilbert (Assistant Professor and Chair of Automotive Management), both recipients of Northwood's Faculty Excellence Award, revealed that companies might see a drop in morale and productivity with higher turnover rates of managers and workers while implementing empowerment programs (Estes 1997).
Two studies done in 1998 by Mary Hocutt (College of Business, Samford University) and Thomas Stone (Oklahoma State University) , concluded that (1) employees when supplied with autonomy and adequate training to deal with service recovery problems are more likely to be satisfied; and (2) customer satisfaction comes quicker when ``service recovery problems are resolved by responsive and empathetic employees'' (Hocutt & Stone 1998).
Sears, Roebuck and Co., in the early 1990's started to provide increased value of service to customers when authority was delegated to employees and individual stores (Boone & Kurtz 1998).
Eastman Kodak Co. has 1,500 employees who work in self-managed teams. The Zebras (called this because they make black-and-white films) control anything from schedules to the development of new products (Boone & Kurtz 1998).
Several companies have integrated employee empowerment as part of their TQM programs. Such companies include General Electric, Intel, Ford, Saturn, Scandinavian Airline Systems, Harley-Davidson, NCR, Goodyear, and Conrail (Robbins 1996).
Enterprise Rent-A-Car is also empowering their employees to help business grow. One of the things that employees have done is offer clients fresh donuts from a customized Enterprise Rent-A-Car donut box. They noticed some revenue growth (Hadden 1999).
Delta Airport Inn in Richmond, British Columbia empowers their employees. Front desk clerks are entitled to give away free hotel nights if anything goes wrong with a guest regarding their guaranteed housekeeping. They have an employee empowerment policy called ``License to Please'' and it is strictly enforced (Ralston 1999).
Great Plains was recently recognized by Arthur Andersen with two awards: ``Exceeding Customer Expectations'' and ``Motivating and Retaining Employees''. The company commented that the base for its superior customer service is ``smart, happy and empowered employees'' (Fortune, March 1999).
United Airlines Inc. have several ways to empower their employees. Front liners and customer relations agents must, whenever possible, resolve customers' complaints on the first contact. Travel credits, expense refunds, meal, hotel and ground transportation vouchers may be given to customers who have experienced irregular flight operations (UAL 1997).
The highly competitive restaurant industry is a good example to benefit from empowerment. Those that are pushing authority down the line to their employees are offering more superior customer service. An upset customer that finds a strange object in their food for example, can be immediately pampered by the server with free meals or deserts without the need of further authorizations (Potochny 1998).
There is one example (not specifically mentioned) of a major gas company that allows empowered employees to make recommendations on coworkers' performances, which will then have an impact on their salaries, positions and assignments. It was commented that normally in this case human nature takes over and votes are in benefit of popular employees despite their job accomplishments or how many sick days they might have taken in a year (Ives 1996).
One last example found was of an orchestra. It was said that even though they have large salaries, symphony musicians are some of America's unhappiest people. They must play and wear what they are told to, go where they are told to, make noise or silence when they are told to, and always follow the maestro's commands. In this case, any initiative and employee empowerment would simply not work!(Nadler 1999).
This topic has long interested me. During my two year work experience period at an international airline in my home country of Brazil, I worked as a Customer Relations Representative, taking all forms of customer complaints and resolving them. I listened to their problems, analyzed them, gave feedback and explanations, reanalyzed them and came up with a final solution and indemnification. I was happy to have been empowered enough to be able to solve most of our clients' complaints. I could issue several types of compensations without having to wait for the manager's approval. If the claims were under a certain amount I could offer the compensation myself. This highlighted the objective of resolving passengers' complaints upon the first contact with the airline.
I have always believed that people are the most important resource of a company, not an expense. If a company has ``raw'' people that are at least willing and able to attain a company's goals and objectives, then just a bit more direction, teaching and coaching will perfectly refine them to become very precious and valuable resources. Most companies today have their main focus on satisfying final customers. In many cases, with highly competitive environments and a few options for competitive advantages, companies must overemphasize the time and resources devoted to ``polishing'' employees. In turn, very outstanding customer service will be provided, giving organizations in the end more satisfied customers who are receiving courteous and effective service, employees who also feel more fulfilled with the psychological and possible monetary results, and finally senior management who will smile from ear to ear after seeing the bottom line. This ``polishing'' of employees is the main guide for a successful employee empowerment program in my view. By polishing I mean the whole process that employees must go through prior to becoming effective and efficient decision-makers. Receiving information, being exposed to other departments' roles, sharing ideas, dialoguing, having group meetings and teamwork, receiving clear missions and questions, together with protection and support, will, in my opinion, simultaneously add and give the base for a happy implementation of any employee empowerment program.
This is just a quick note to acknowledge and thank Dr. Sanjay Ahire, Associate Professor of Decision Sciences IUSB, for the time, support and sponsorship dedicated to this project and its presentation during the Indiana University 5th Annual Undergraduate Research Conference realized in Indianapolis - October 1999.
Special thoughts also go to my parents and brother who have always encouraged and helped me to continue my studies, and to my dear husband Gaetano Santospirito whose support, motivation and constant positive attitude in life keeps me going! Thank you.
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