Employee Empowerment

VOLUME 2 NUMBER 3 1994

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

Employee Empowerment: A study of employee participation (empowerment) in promotion, evaluation, job content, technological change, work standards, financial policies, cost control, organization structure, work force size, safety programs, work methods, and pricing.

History of Participation Worker participation has been a popular topic of studies of organizational behavior since the 1940s and 1950s. Those who entered the field early were far more successful in creating a field for academic study than establishing a link with practical application. Even the earliest findings suggested that great potential existed for improving job satisfaction and performance through the use of worker participation. However, researchers in the academic field had little success in interesting management in this concept[2]. After World War II, the United States was known around the world for its superior management methods, and productivity teams came to the United States from Europe to learn them. US managers did not feel there was any reason to change their current thinking on management. Since at that time their methods were so successful, they were not receptive to ideas about participative management[2]. During the period after World War II, a number of Japanese professors and managers came to the United States. The Japanese read the literature published by the academics and assumed they were reading about the actual policies and practices of US companies. They picked up the ideas provided to them by these human relations researchers and returned home to redesign and reinterpret these ideas

Employee empowerment or participative decision making is neither a new or simple management concept. Employee participation is a complex management tool that over 50 years of research has proven that, when applied properly, can be effective in improving performance, productivity and job satisfaction[1]. The purpose of this article is to provide a general review of what has been written about employee empowerment or participation. This review contains a history of participation, areas, methods, and forms of participation and factors essential for effective participation. Also, there are appropriate situations that call for the use of participation, since not every employee can participate in every decision. In addition, participative decision making carries certain ramifications with it affecting the organization and employee. Finally, the effectiveness of participative decision making is examined noting that studies have produced mixed to moderate results with the final assessment being that if certain guidelines are followed, participative management can be successful.

This research was made possible by a Management Academic Challenge grant from the University of Toledo, Ohio.

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

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to rebuild their organizations. For example, the origin of quality circles can also be traced to the United States. In 1951, W. Edwards Deming spent several weeks in Japan lecturing and demonstrating methods of quality control. The Japanese, well aware of their reputation for poor quality products, eagerly accepted Deming’s suggestions[2]. About the same time the Europeans and Japanese were invading the United States to gain managerial knowledge, Sears instituted a survey program designed to measure workers’ and supervisors’ reaction to human relations in the company and various aspects of their jobs. Sears also developed a way to report the results back to the managers. Soon more and more companies began developing their own internal survey programs and began exchanging ideas with each other[2].

practitioners, and workshops and courses on these management techniques began to appear[3]. As we moved into the 1980s, it became clear that we were no longer competing effectively with the Japanese. Japanese management style placed a high emphasis on human relations, and as a result, by the mid1980s arguments for participation became even stronger[3]. Today, it is likely that participative management will increase in the 1990s because of the complexity of decisions that will need to be made in a changing environment and the increasing pressure of world competition[3]. History has shown that organizations have taken these management ideas and adapted them to their own culture. As a result four broad areas of employee participation and three methods of application have been developed. Any combination of these determines the form of participation used.

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Japanese management style placed a high emphasis on human relations

Areas, Methods and Forms of Participation

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One of the four areas of participation is goal setting. Employees can take part in establishing a goal for a task, designing a job or even the speed at which the work should take place. Next, employees can take part in making choices among alternative courses of action presented to them such as working hours, placement of equipment or simply choices between set alternatives to complete a routine task. Third, employees can take part in solving problems, which involves defining the issues and setting the alternative courses of action. Finally, participation may involve making organizational changes, such as setting company policies that might involve hiring, layoffs, profit sharing or investments. Employees may participate in any or all of these four areas at any one time[1,4].

By the 1960s and 1970s worker participation programs were on the rise in the United States. Quality circles used in the United States had been readapted to our culture from that of the Japanese. Rather than having the management in control, as in Japan, the United States programs were administered jointly by leaders of management and labor[2]. In the United States, participative management was often confined to a task or special project and as soon as the problem was solved or the goal achieved, participation ceased instead of being supported as a continuous management practice[2]. During this time, participative management ideas began to create a considerable amount of interest among management theorists and

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quality circles concentrate on small groups but do not pay the monetary rewards[4]. Like participation in work decisions and consultative participation, short-term participation is formal, direct and focusses on work issues, and workers have a high degree of influence on the decisions made. The only difference is in the duration, which can range from a single laboratory session to training sessions of several days. Studies of this type of participation show either mixed results or no effect on job satisfaction, performance or motivation, but show a positive relationship to perceived influence[4]. Some organizations do not have groups established for formal participation, but do engage in participative decision making through informal participation. This would occur through interpersonal relationships between managers and subordinates and revolve around issues directly concerning the subordinate’s work. Studies have found this type of participation to be positively related to job satisfaction, including the supervisor and the work itself, and motivation and commitment[4].

Three primary methods of participation apply to all areas of participation. Employees can participate as individuals, making their own decisions and setting their own goals, or they may pair up with a manager to form a decision-making team. All employees may participate in a decision-making group with other members of the group being managers or co-workers[1]. This participation may be formal as in quality circles or may be informal with members of a group expressing opinions in order to reach some consensus. Employees may participate directly in decision making or indirectly through a representative elected to present employee ideas or concerns to a group[4]. There are several combinations of methods and areas of decision making, but as a result of testing, six basic forms have emerged. These forms can be best classified by how much influence organizational members have in making a decision[4]. Participation in work decisions and consultative participation both focus mainly on work issues, such as what is to be done, how it is organized, and who will do what. Both of these types of participation are of the formal, direct and long-term type. The only difference between these two types of participation is the amount of influence that the employee has. Participation in work decisions carries much more influence, where employees have the final say. In consultative participation, employees may give their opinions but have no final decision making power. Some studies have found that participation in work decisions generates a more positive attitude toward supervisors and the company. Also, though results of some studies are mixed, there seems to be a positive trend toward job satisfaction when consultative participation is used. Quality circles and Scanlon plans fall into this group. Scanlon plans provide monetary bonuses for productivity suggestions, while in contrast,

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Some employees may even participate directly in decision making n Both formal and indirect participation are found in employee ownership. It is formal because the employees have the right to participate as stockholders, and indirect because even though the employees own the company, it is run by managers who make the strategic decisions. Employees have a high level of influence through stockholder meetings and election of the board of directors. Some employees may even

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culture that emphasizes participative management[3]. Another factor is the design of the actual work to be done. If workers are mutually dependent on each other to get the work done, encouraging autonomous individual participation would be counterproductive. Also, if employees do not trust their managers, it is unlikely that participation from pairing workers and managers would succeed. The last set of contingencies is concerned with the environment. With rapidly changing technology, governmental regulations, and intense competition, group participation may prove to be the most effective when members have the technical skills necessary and are currently up to speed on the latest issues. These groups must also be able to work effectively together to reach a decision[1]. Not only must organizations be able to manage these contingency factors skillfully, but they must have an understanding of the mechanisms for participation to work best. According to Locke et al.[5], motivational and cognitive mechanisms are the most important mechanisms in participation. They say, “Motivational mechanisms include actions such as trust, greater control of the work, more ego involvement on the job, increased identification with the organization, …and the setting of higher goals and/or increased goal acceptance”. They also stated that cognitive mechanisms include more upward communication and better utilization of information by supervisors who do not have the knowledge or enough information to make a high quality decision on their own. Also, employees begin to understand their job better and the reasoning behind decisions. In an effort to clarify when and to what extent participation in decision making should be used, Victor Vroom and his colleagues at Yale developed a decision-making model[5]. The model defines five options for employee participation and seven rules that determine

participate directly in decision making. Employee ownership has been found to have a positive relationship with organizational performance. Thus it appears that the degree of ownership has a direct relationship to higher profits[4]. Similar to employee participation, is representative participation, which is formal, indirect, but of medium to low influence. Employees do not participate directly but through representatives elected to a board or governing body. Representative participation through worker councils or a board of directors can focus on any issue instead of just worker issues. Unlike employee ownership which has high influence, representative participation can range from having a vote on the board of directors or just having an advisory voice on the worker’s council. This type of participation seems to result in increased satisfaction at least for the representative[4]. All of these areas, methods and forms of participation further illustrate the fact that participative management is a multidimensional concept. In addition, there are contingent factors that affect the success of participative decision making, and also, there are certain situations in which participation works best.

Contingent Factors and Appropriate Situations for Participation Certain conditions exist that affect the success of participative management, and unless these conditions are managed skillfully, an attempt at participative management may fail. One set of conditions is composed of the values, attitudes, and expectations of an organization’s members. Some workers do not want to participate in decision making, and any attempt to force them to do so would fail[1]. For participation to be effective, an organization must maintain a corporate

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the conditions under which each of the five options are effective. The five options are:

Kanter[6] provides the following list of situations when participation works best:

(1) make the decision yourself using available information;

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to gain new sources of expertise and experience;

(2) obtain the necessary information from subordinates, but make the decision yourself;

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to get collaboration that multiplies a person’s effort by providing assistance, backup, or stimulation of better performance;

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to allow all of those who feel they know something about the subject to get involved;

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to build consensus on a controversial issue;

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to allow representatives of those affected by an issue to influence decisions and build commitment to them;

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to tackle a problem that no one “owns” by virtue of organizational assignment;

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to allow more wide-ranging or creative discussions/solutions than are available by normal means (for example, getting an unusual group together);

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to balance or confront vested interests in the face of the need to change;

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to address conflicting approaches or views;

(3) get ideas and suggestions from individuals separately, then make the decision which may or may not reflect the subordinate’s input; (4) share the decision with the group, and make a decision that may or may not reflect their input; and (5) share the decision with the group and together make the decision. Next, the best option is then chosen based on the use of seven decision rules. These are: (1) whether the decision has a high-quality requirement; (2) whether the leader has sufficient information to make a high quality decision; (3) whether the problem is structured; (4) whether acceptance of the decision is essential for effective implementation;

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(5) whether an authoritative decision would be accepted if made;

to avoid precipitous action and explore a variety of effects;

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(6) whether conflict among subordinates is likely in the decision; and

to create an opportunity and enough time to study the problem in depth;

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to develop and educate people through their participation: creating new skills, new information, and new contacts.

(7) whether subordinates share organizational goals to be attained in making a decision. Vroom’s own research supports that decisions made following these guidelines are of higher quality than those made when not following these rules[5]. Although participation cannot always be the preferred decision making method, there are certain situations when participation seems the most advantageous. Rosabeth Moss

In summary, the psychological attitudes of employees and managers, the climate of the organization, the environmental conditions, the issues, the situation, and the kind of problem to be addressed determine first if participation is the method to use, and if so, these factors will have an effect on its success. Even when participation is the

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dilemmas surrounding the structure and management. A clear structure is important for making an empowering process like participation work. From the beginning, ground rules and boundary conditions need to be established. Too many choices can be frustrating, and the fewer constraints placed on a team, the more time they will spend defining their structure than accomplishing the task. In short, the existence of people who can mobilize others and set constraints is an essential part of making participation work. Another issue related to structure and management is that the manager not only sets the constraints, but also remains involved enough to coordinate activities, support employees and review the results. He/she does not simply delegate the task to a team and walk away without monitoring the progress. Last, it is important to find and manage the time needed for participation. Workers must feel that attending the group meetings is worth their time and effort so worker apathy does not develop[6]. Next, is the issue of choice, or which issues are to be involved in participative decision making. Studies have shown that workers prefer to be involved in issues most closely related to their primary job function. Participation in local issues that are daily annoyances is more enthusiastically received by workers. However, it is very important not to make assumptions about which issues are most important to workers; they should be asked. Visible results are most likely to be seen when teams approach local issues, and employees will feel that their time was well spent if they can see tangible results. Participatory mechanisms that simply set agendas rather than produce action are regarded as a part of the organization’s control system and not an empowering device. Visible results eventually evolve into some type of reward system. Once participation has passed the experimental stage, employees may want compensation or

chosen mode of decision making, it does not come without ramifications.

Dilemmas of Participation Managing participation does not come without potential problems in the areas of initiation, structure and management, choice of issues, teamwork, and evaluation. Frequently, when organizations decide to begin a program of participation, someone at a higher level directs others to get involved in setting up task forces and teams. Additionally, the managers who are directed to carry out this activity will be evaluated on the success of their teams. These middle managers have very little to say about the start-up of these programs, and top level managers are certainly not modeling the behavior they wish to see in their organization. Another problem in the beginning stages of participation is the manner in which the organization presents the program to the employees. Leaders sometimes present participation as a gift rather than a results-oriented tool. Presenting participation as a luxury is insulting to employees. However, introducing participation along with clear explanations of what management hopes to gain from this concept is more readily accepted by employees. Finally, the last dilemma in the start-up stages is which employees to get involved. If participation relies on volunteers, it is not representative, if it does not, it is coercive. It is important to have people with appropriate skills and enthusiasm on teams, but it is also equally important not to assign people to teams without letting them have any say in the decision. Also, it is important not to have peer and management pressure that would make an employee afraid to say no even if they are asked formally to participate[6]. In addition to potential problems in initiating participation, there may be

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recognition for their time and ideas. People need to feel they can benefit from contributing to the effectiveness of the organization[6].

individuals as to the nature of the problem, and steps to solve the problem, but do not communicate their opinions to the rest of the group. Thus they lead one another to misperceive collective reality. With misperceived information, which is inaccurate, members make collective decisions contrary to what they really wanted to do, and that may be destructive to the organization. As a result of these actions, members feel frustrated and angry. They begin forming subgroups, and blaming each other. If corrective steps are not taken, the cycle will repeat itself with greater intensity[7]. Also, all members of a group vary in personality and personal resources. Some have personalities that seem to “fit right in”, and some are better communicators than others. Each member brings different skills, needs and interests to the group. From this team politics can arise[6]. Sometimes this progresses to the point that the group staying together as a united team becomes the most important concern and the real reason or mission of the team becomes secondary. These groups become victims of “groupthink” which results in seven major defects of problem solving. They are:

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Lower status people may feel intimidated n Furthermore, once the team is established, members need to feel that they are a necessary part of the whole group. Teams formed with individuals at different levels of the hierarchy of an organization sometimes fall into a pattern of duplicating the organizational hierarchy in miniature. Comments from those who come from higher status positions are treated most attentively. Lower status people may feel intimidated and be afraid to contribute to group discussions, particularly if they do not agree with the higher status person. Moreover, if they feel too dominated, lower status people may drop out of the group. Another factor may be that the member with the most knowledge of the subject under discussion may be the most effective participant. Often organizational position can create this difference on the team. Those less well informed members will have little to contribute and may respond by dropping out, or they may be forced to support a decision of the group that they had little part in making[6]. For whatever reason, whether it be lack of knowledge, intimidation, or fear of separation from the group, some groups frequently take actions in contradiction to what they really want to do, and therefore, defeat the very purpose they are trying to achieve. This is more popularly known as the “Abilene Paradox”. Members agree privately as

(1) There is an incomplete survey of alternative courses of action. (2) There is an incomplete survey of objectives to be fulfilled. (3) There is failure to re-examine the preferred choice for non-obvious risks and drawbacks. (4) There is failure to reconsider any previously rejected alternatives. (5) There is little or no attempt to consult experts. (6) Members only show interest in facts or opinions that support their preferred choice.

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(7) Members fail to work out contingency plans to deal with unforeseeable setbacks[8].

goal-setting interventions[10]. Wagner and Gooding[10], in studies that contrasted directive versus participative processes, found a correlation between participation and satisfaction when participants were asked to perform simple tasks. This is important because it helps support the suggestion that participation helps enrich simplified work[10]. Smith and Brannick also speculate that participation causes greater job satisfaction because the employee feels more valued and trusted by management, and because the worker gains a better understanding of management difficulties by dealing with some of the same problems[11].

Finally, there are dilemmas involved in the evaluation of participation. Regardless of how well participation works, it will not solve all of an organization’s problems. It is merely a technique to seek more involvement and input in a changing environment with a more sophisticated workforce. Disappointments for leaders and employees are likely to be proportional to the amount initially promised. Management clearly needs to communicate in the beginning what will and will not come out of the participatory process, and how the results will be measured along with how employees will benefit. Employees will then set their goals accordingly. Last, the final point to consider is the question of whether participation is appetite stimulating or appetite satisfying. Depending on the employee and the outcome of the experience, the answer could be either[6].

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It is not participation per se that increases job satisfaction n

Effectiveness of Participation Some researchers suggest that it is not participation per se that increases job satisfaction and performance, but rather an improvement in employee expectancies, effort-performance expectancy and performance-reward expectancy, that influences satisfaction and performance[12]. Schuler[12] suggests that participation is related to the employee role perceptions of conflict and ambiguity, and therefore, the more participation in decision making, the lower the levels of role conflict and ambiguity. Role and expectancy perceptions may be influenced by psychological, organizational and environmental contingent factors. Most participation research of this type has dealt with issues directly relating to the employee. Participation in decision making is related to the employee’s

Several studies have been done over the years that produced mixed results as to the effectiveness of participation on job satisfaction and performance. There are several variables to consider: role conflict and ambiguity; expectancy perception; stress; goal setting; job level; personality; and task characteristics. Researchers have concluded that participation has at least a moderately positive affect on job satisfaction and productivity. Miller and Monge[9] reported a positive correlation between participation and job satisfaction in studies conducted in organizational settings that incorporated measures of multiple-issue participation. A correlation between participation and productivity was revealed when they averaged the results of field studies lacking

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Studies have shown that hard goals lead to higher performance than easy goals, regardless of the method by which they were set[15]. A series of studies provides strong support for Locke’s theory that specific goals lead to higher performance than generalized goals. Also, there is a linear relationship between goal difficulty and performance. Participation in task strategy from a motivational standpoint affects performance only to the extent that it includes the setting of specific goals that are more difficult than those assigned by the supervisor. In short, motivational effects of participation on performance appear to be minimal[15]. Next, early studies on the effects of participation focussed on the subordinate’s personality characteristics, primarily the need for independence. Participative decision making was hypothesized to have a more positive effect on subordinates with a high degree of independence. However, the pathgoal theory suggests that both task and personality characteristics interact to determine effects of participation on job satisfaction and performance. Schuler discovered in 1976 that participation in decision making was satisfying to low authoritarian subordinates regardless of the degree of task repetitiveness, but was satisfying to high authoritarian subordinates only if the degree of task repetitiveness was low[16]. The-high-need-for-independence subordinate shows significant differential responses in terms of job satisfaction and performance to participation under different degrees of task repetitiveness. The path-goal theory predicts that low-need-forindependence subordinates are the ones that should exhibit such a response. The path-goal theory suggests that when the task is highly repetitive, and subordinates are not allowed to make their own work decisions, participation would be of little value because it would not

perception of the performance-reward expectancy because it allows a chance for the employee to verify the actual performance contingencies in the organization with his or her supervisor and fellow employees. Also, the more participation an employee has with his or her supervisor, the more chances there are for role clarification and conflict awareness and resolution[12]. Also, both role conflict and ambiguity have been predicted to affect emotional strain. One frequently suggested method of reducing job strain has been participation in decision making. Some theorists have argued that the mere belief in one’s ability to influence the environment will help reduce frustration and strain. Therefore, participation in decision making gives workers a vehicle to overcome obstacles to effective performance[13]. Past research has indicated that attitudes toward participative decision making can vary across different levels of job involvement or to the extent of how closely one identifies with his or her work. Participation is considered less effective among uninvolved workers since such workers are assumed to be less receptive to participative practices. However, with these employees, such programs have proved to be most successful. In addition, participative practices are often a natural part of higher level managerial positions. Employees in lower level routine jobs, who traditionally have had little input in the decision-making process, are often the most receptive to participative programs; thus the greatest impact is often at the lower level[11]. Another factor to consider in evaluating participation is the motivational effect of participation versus goal setting on performance. Meyer et al. in 1965[14] found that to improve performance – how a goal was set, participative or directive – was not as important as the fact that a goal was set.

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organizations who wish to remain competitive must use the potential of all their members[3].

be required for effective task performance [16]. In summary, the effectiveness of participation in decision making has no simple answer but varies with the form of participation and the criteria for effectiveness. Overall, years of study produced results that are not overly encouraging. Therefore, we are left with the conclusion that sometimes participation in decision making has a positive effect on job satisfaction and performance, and sometimes it does not[3].

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References 1. Sashkin, M., “Participative Management Is an Ethical Imperative”, Organizational Dynamics, Vol. 12, 1984, pp. 5-22. 2. Whyte, W.F., “Worker Participation: International and Historical Perspectives”, The Journal of Applied Behavioral Science, Vol. 19 No. 3, 1983, pp. 395-407. 3. Pringle, C.D. and Dubose, P.B., “Participative Management: A Reappraisal”, Journal of Management in Practice, Vol. 1, 1989, pp. 9-13. 4. Cotton, J.L., Vollrath, D.A., Froggatt, K.L., Lengnick-Hall, M.L. and Jennings, K.R., “Employee Participation: Diverse Forms and Different Outcomes”, Academy of Management Review, Vol. 13 No. 1, 1988, pp. 8-22. 5. Locke, E.A., Schweiger, D.M. and Latham, G.P., “Participation in Decision Making: When Should It Be Used?”, Organizational Dynamics, Vol. 14, 1986, pp. 65-79. 6. Kanter, R.M., “Dilemmas of Managing Participation”, Organizational Dynamics, Vol. 11, 1982, pp. 5-29. 7. Harvey, J.B., “The Abilene Paradox: The Management of Agreement”, Organizational Dynamics, Vol. 2, 1974, pp. 63-80. 8. Janis, I.L., Groupthink, Houghton Mifflin, Boston, MA, 1983. 9. Miller, K. and Monge, P., “Participation, Satisfaction and Productivity: A Metaanalytic Review”, Academy of Management Journal, Vol. 29, 1986, pp. 727-53. 10. Wagner, J.A. III and Gooding, R.Z., “Shared Influence and Organizational Behavior: A Meta-analysis of Situational

Conclusion Participation in decision making, or employee empowerment, is a management concept that has been the subject of over 50 years of research. Participation can be used in several areas, methods and forms which are all subject to psychological, organizational and environmental factors for success. Participation is not appropriate for every decision-making situation, but if it is the chosen method for dealing with a task or problem, it must be managed skillfully. Participation must be managed to avoid potential dilemmas that can arise in initiating the program, structure, choice of issues, and the decision-making teams involved. Finally, if certain guidelines are followed and its limitations are understood, participation can be an effective tool. As we move through the 1990s increasing emphasis will be placed on participative management mainly because decisions are becoming more complex and managers will be required to integrate the knowledge of specialists in different functional and technical areas. Moreover, those that are entering the workforce today have higher expectations of being involved in management decisions. Finally, with the pressure of worldwide competition,

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11.

12.

13.

14.

Variables Expected to Moderate Participation-Outcome Relationships”, Academy of Management Journal, Vol. 30 No. 3, 1987, pp. 524-41. Smith, C.S. and Brannick, M.T., “A Role and Expectancy Model of Participative Decision-making: A Replication and Theoretical Extension“, Journal of Organizational Behavior, Vol. 11, 1990, pp. 91-104. Schuler, R.S., “A Role Expectancy Perception Model of Participation in Decision Making”, Academy of Management Journal, Vol. 23 No. 2, 1980, pp. 331-40. Jackson, S.E., “Participation in Decision Making as a Strategy for Reducing Jobrelated Strain”, Journal of Applied Psychology, Vol. 68 No.1, 1983, pp. 3-19. Meyer, H.H., Kay, E. and French, J.R.P., ”Split Roles in Performance Appraisal”,

Harvard Business Review, Vol. 43, 1965, pp. 123-9. 15. Latham, G.P. and Steele, T.P., “The Motivational Effects of Participation versus Goal Setting on Performance”, Academy of Management Journal, Vol. 26 No. 3, 1983, pp. 406-17. 16. Abdel-Halim, A.A., “Effects of Task and Personality Characteristics on Subordinate Responses to Decision Making”, Academy of Management Journal, Vol. 26 No. 3, 1983, pp. 477-83. Nick Nykodym, Jack L. Simonetti and Barbara Welling are in the Management Department, College of Business Administration, University of Toledo, Ohio, USA. Warren R. Nielsen is in the Department of Management, Illinois State University, Normal, Illinois, USA.

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