What impacts employers' decisions when it comes to employee empowerment?

As the business landscape continues to evolve and pressures to remain competitive mount, organisations are increasingly recognising that their employees are key to realising strong firm performance and, ultimately, competitive advantage. It is no surprise, then, that organisations are making considerable investments in programs designed to promote employee empowerment. Perhaps the gold standard when it comes to employee empowerment, Ritz-Carlton famously empowers each employee by providing them with $2000 in discretionary funds (per customer, per day) to address customer complaints in a manner that they feel is best.

Decades of research evidence would support that employee empowerment is a wise investment. For instance, empowered employees are more committed to their work and workplace, are generally more satisfied and less likely to quit, and ultimately outperform their lesser empowered colleagues. Given the many upsides associated with empowerment, it would seem that when deciding whether to empower their employees, leaders should have an easy decision, right?

Well, not necessarily. In fact, many leaders are averse to the idea of involving employees in problem-solving, delegating decision-making authority, or providing their employees with autonomy over their work – all critical components of empowerment. Although employee empowerment offers a number of potential benefits, there are also potential costs that might make leaders rightly reluctant to do so. For instance, giving employees greater autonomy also brings with it the risk that employees might make costly mistakes, that they might not make decisions quickly enough and miss critical deadlines, or that they may behave opportunistically by taking too many breaks or withholding effort that ultimately slows production. There is also emerging evidence that for some employees, empowerment is cognitively taxing, stressful, and hurts their performance. When considering both the potential upsides and downsides of employee empowerment, we expect that leaders are likely to be judicious in deciding which employees to empower. The goal of our research was to provide initial answers to the question: Why do leaders empower some of their employees but not others?

Findings from our recent study suggest that there are certain employee characteristics that make leaders more likely to empower them. We surveyed 116 leader-employee pairs and found that leaders were more likely to empower employees with a proactive personality. Having a proactive personality is characterised by a willingness to seek feedback and opportunities to improve one’s skill set and actively looking for ways to contribute to one’s work environment positively. Moreover, more proactive employees are more likely to persevere in the face of challenges and to view challenging events as opportunities rather than obstacles.

Beyond just demonstrating that a more proactive personality was associated with greater empowerment, we wanted to figure out why. Our research suggests that leaders are more likely to empower more proactive employees, in part because they trust them more. More specifically, we found that leaders were most likely to empower proactive employees when they essentially both liked the employee more (higher levels of affective trust) and believed that the employee was more capable (higher levels of cognitive trust). Taken together, these results suggest that leaders trusted their proactive employees more and in turn, were more likely to empower them.

We suspect that employee proactivity might signal to the leader that the employee has the organisation’s best interests at heart and wishes to make the organisation a better place. Trusting that their employee has both the desire and aptitude to positively contribute to the workplace helps reduce some of the risks associated with empowering employees and thus, makes leaders more willing to do so.

So, what is an organisation to do? If employee empowerment is an organisational goal, organisations might consider first selecting on the basis of proactive personality. Ultimately, some individuals will be better able to handle the challenges associated with empowerment, and proactivity seems to be important in this regard. Second, organisations might consider training their employees on how to be both more proactive and how to handle empowerment. Such training programs can be designed to help employees identify potential problems or issues in the workplace and provide guidance on how to address them. Finally, organisational leaders should be prepared to trust and support their employees. Undoubtedly, any employee is bound to make a mistake. How an organisation reacts in the face of such mistakes has the opportunity to either undermine or strengthen employee empowerment programs. Supporting employees and helping them to learn and improve will be key to realising the benefits that employee empowerment has to offer.