In today’s business age, organizations are looking for the extra edge to allow them to  outperform their competitors and to gain market share. An important factor in direct  correlation to an organization’s performance is employee productivity. So, the next  question most of us ask is “How can I improve employee productivity?” Many  businesses in the modern world believe the philosophy that empowering employees will  improve productivity and will provide other benefits. This philosophy is based on the  theory that as employees are empowered to take control and make decisions, they feel  more confident, capable, and determined to work more effectively and efficiently. As a  result of these business practices, employees become more productive.

A company that embraces employee empowerment and consistently outperforms their  competitors is Toyota. Toyota believes that every employee should take ownership in  the company by identifying quality defects and ways to improve efficiency. This  philosophy has established the company as a quality champion to most automobile  buyers. Toyota’s dedication to employee empowerment and quality has allowed the  company to become the world’s third largest automobile manufacturer.

In order to solidify your understanding of why companies choose to embrace employee  empowerment, you must first realize the benefits associated with employee  empowerment. Let us take a closer look at some of the positive impacts that e mpowering employees can have on an organization’s quality of work, employee  satisfaction, collaboration, productivity, and costs.

 Quality of Work

Employees have a need to feel like they are participating in the well-being of the  organization. They want to know that they are contributing to the organization’s success  and that they are making a difference in the world. In organizations that provide  employees with the freedom and flexibility to make a difference, employees feel  empowered to deliver high quality work. For instance, HCL Technologies’ empowerment  philosophy has enabled the company to provide innovative, high quality service to their  customers, resulting in revenues tripling and customer satisfaction increasing by 73% in  the last 5 years.  Empowered employees take personal pride in their work and  responsibility for doing a good job. As a result, organizations reap the benefits of  empowered employees by delivering high quality products and services.

 Employee Satisfaction

Research often cites high levels of employee satisfaction as a major advantage to  empowering people in the workplace. In a 1999 research study conducted by the  National Association of Working People, companies with high levels of employee  satisfaction were examined to uncover the source of satisfaction. The case study  discovered that companies with high levels of employee satisfaction had a flexible,  engaging work culture, which empowered employees. In addition, Wagner & Harter  (2006) reconfirmed this notion, citing empowered employees with higher levels of  satisfaction than organizations with more structured, hierarchical, and less flexible work  environments. In these environments where employees were empowered, employees  were granted the power to identify problems, provide solutions, and make important  decisions. Increased responsibility, flexible work schedules, a fun work culture, and  public recognition for success stories all contributed to the employees’ sense of feeling  empowered. In return, employees rated their satisfaction levels as high compared to  other organizations with cultures that prohibited employee empowerment.

According to Wagner & Harter (2006), increased levels of employee satisfaction lead to  higher levels of loyalty, resulting in increased retention ratios. In addition, the quality of  work produced by satisfied workers tends to be higher, reducing the number of product  defects and poor service issues. Overall, these items contribute to increased  productivity for the employee and the organization, resulting in an improved bottom-line  for the company.

 Collaboration

As employees are empowered and treated as vital components of the organization, they  gain self-confidence in their abilities to positively influence the organization. Employees  with healthy levels of self-confidence and self-esteem are more willing to share  information with others. They feel comfortable exchanging ideas and collaborating with  others in an honest and open manner. These behaviors promote teamwork and active  involvement in support of company-wide goals that could not be achieved with a  disjointed, non-connected workforce. As the famous saying from Helen Keller goes,  “Alone we can do so little; together we can do so much.” Collaboration often allows for  an organization to achieve so much more than any one individual can achieve on his or  her own.

  Productivity

Employees who are granted the power to take charge at work feel an increased sense  of responsibility, accountability, and ownership for their work. They work diligently to  meet project deadlines and organizational goals. They feel energized to do what it takes  to get the job done and to do it right. All of these reasons fuel an empowered employee  to be more productive, providing better performance results for the organization. For  example, GE instituted a “work-out” program intended to empower employees to identify  and eliminate redundancy, waste, and bureaucracy that exist in big corporations like  GE. Employees felt energized to meet the challenge and their creativity was unleashed  as they restructured daily job functions and processes. As a result, employee  productivity skyrocketed and transformed GE into one of the largest, most profitable  companies in the world.

Costs

Reduction of costs is another advantage of empowering employees. Many factors  contribute to this advantage. For instance, as employee satisfaction increases for  empowered employees, employees’ sense of loyalty and dedication to their job and the  organization also increases. According to Wagner & Harter (2006), these actions result  in longer-term employees, less job transitioning, and improved retention rates, thus  reducing employee turnover costs.

Another cost reduction factor is the increased efficiency of operations due to more  engaged and accountable employees. As employees become involved in day-to-day  decisions and take a sense of pride in their work, they become aware of inefficiencies in  routine functions that cost the company money. According to The Gallop Organization,  organizations that enable employees to be more empowered and engaged, experience  27% higher profits (Wagner & Harter, 2006). Empowered employees feel comfortable  sharing their innovative solutions with management, providing cost-cutting measures t hat benefit the organization. These solutions are invaluable to the organization running  both efficiently and effectively without excess overhead costs.

Empowered employees also contribute to reducing costs associated with customer  service issues. Employees with the power to make decisions and find solutions to  customer complaints are able to provide exceptional customer service, yielding happier  customers with increased loyalty to the company. The Gallop Organization notes that  organizations that empower employees experience 50% higher customer loyalty  (Wagner & Harter 2006). As customer retention and satisfaction increases, costs  associated with keeping and maintaining the organization’s customer base decreases.

Hence, company resources are freed up to focus on growing the business instead of on  how to stop customers from leaving.

Conclusion

Employee empowerment is a philosophy associated with real benefits for an  organization. Its underlying principle of giving employees the freedom, flexibility, and  power to make decisions and solve problems leaves an employee feeling energized,  capable, and determined to make the organization successful. As a result of these  management practices, quality of work increases, employee satisfaction increases,  collaboration increases, employee productivity rises, and organizational costs decrease.

All of these benefits enable an organization to achieve a competitive advantage and to  bolster its bottom line.

 

Reference:

Michaels, A. Sharon and Bianco, P. David. Encyclopedia of Business, 2nd ed.

“Empowerment.” Retrieved from

http://www.referenceforbusiness.com/encyclopedia/Eco-Ent/Empowerment.html.

Wagner, R. & Harter, J.K. 2006. 12: The Elements of Great Managing, New York:

Gallup Press.

Retrieved from the