The Advantages Of Employee Empowerment

Empowerment is about putting employees in the driver’s seat.

Employee empowerment went from being a buzzword among managers during the 1990s to a sought-after part of quality management among service industries by the early 21st century. Such professional organizations as the Society for Human Resource Management (SHRM) cite employee empowerment as one of the “critical drivers of business success in the global marketplace.” Commonly defined as giving employees the power and authority to take control of workplace situations that would normally be handled by line managers, research published in such trade journals as IndustryWeek as well as from professional organizations like SHRM show there are several advantages for implementing employee empowerment as a practice in human resources management.

Gain Competitive Advantage

In a research journal published by Indiana University South Bend, Heloisa Fragosa discusses employee empowerment dos and don’ts, but also documents how many of the world’s well-known companies have incorporated employee empowerment programs. A short list of such corporations include: Sears, Roebuck and Co.,Eastman Kodak, General Electric, Intel, Ford, Saturn, Harley-Davidson and Goodyear.

Having an employee empowerment program enables companies to keep up with a competitor or gain a competitive advantage. A census of manufacturers conducted in 2000 by the magazine IndustryWeek along with the PricewaterhouseCoopers consulting firm, found that international manufacturers were twice as likely to have at least 50 percent of its workforce participating in self-directed or empowered teams.

Respond Quickly to Business Problems

A 1998 study by international management consultant, trainer and author Dr. Connie Sitterly found that employees who are empowered make decisions that save companies money, time and, in some cases, prevent potential disputes. Decentralizing the decision-making process can improve the performance of support and service departments by giving customers more confidence in the process of being helped, especially since the empowered employee does not have to check with her supervisor to make minor decisions.

Better Job Satisfaction, Retention and Motivation, a resource for human resource professionals, describes employee empowerment as one of the factors behind increased employee education and training; lower absenteeism, and less conflict with administration and managers related to change because employees are able to participate in decision making. The Society of Human Resource Management found in a 2007 study of employee empowerment trends that there is a link between engagement and organizational performance, saying that “employees with the highest levels of commitment perform 20 percent better and are 87 percent less likely to leave the organization.”

Increased Productivity, Efficiency and Effectiveness

When managers are freed up to be coaches, mentors and advisers instead of management firemen who have to put out mini-situational fires, the company or organization benefits. “Teams Work,” a case study about the success of workplace teams in Sparks, Nevada, showed how the use of teams increased annual productivity by 55 percent and reduced costs by 5 percent each year during the 1990s. “Introducing teaming was vital in the conversion of the plant from a pet-food processing facility to a cereal-making plant,” the report said.

Reduce Costs

Sitterly also noted that empowered employees are able to improve service delivery within their sphere of operations, thus enabling cost savings. Empowering employees can also decrease the need for middle management positions, which conserves labor costs. Employees who take ownership of their work can also yield major savings in the form of workplace safety. A report by the Society of Human Resource Management cited a beverage company that found that engaged employees were “five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident.”

With the average cost of a safety incident for an engaged employee at $63, versus an average of $392 for a non-engaged employee, strengthening employee engagement saved the company $1.7 million in safety costs in 2002, the report said.