Production and Operation Assignment

Productivity Improvement by Employee empowerment

Literature review:

Studies have shown various diversification and classification of employee empowerment. For
instance, structural empowerment, leadership empowerment and psychological empowerment
are three main broad categories of employee empowerment (Sun et al., 2012). Structural
empowerment, improvement of conditions for oppressed groups, and psychological
empowerment , main approaches to study empowerment of employees in
organization(Kuokkanen and Leino-Kilpi,2000). In literature many scholars offered various
definitions of empowerment . For example, according to Del Val and Lloyd (2003)
empowerment is “the involvement and authority of employee in decision making process and
other activities” (Del Val and Lloyd, 2003, p: 102). According to (Jha, 2010, p: 380)
empowerment is “a mechanism of expanding feelings of self esteem and self expression among
organizational members (employees) through the identification of those conditions that foster
and enhance powerlessness and through their removal by both informal techniques and formal
organizational practices of providing efficacy information. Traditional definition was offered by
Ahmad and Oranye (2010), they considered employee empowerment as through self efficacy and
leadership energizing followers is called employee empowerment. It can be done by decreasing
or lowering powerlessness and also increasing internal motivation instead of extrinsic
motivation .Empowerment literature results indicate various meanings and definitions of
employee empowerment. However, most of them show that empowerment literal meaning is to
give authority to employees and discretion in order to perform work tasks more efficiently and
effectively also giving your employee autonomy to solve all problems related to their work tasks.
In short instead of a diversity of various definitions of employee empowerment, this concept
means giving authority to your subordinates at every level to empower them by making them
able to take decisions when serving customers in order to satisfy them(Melhem, 2004). Czuba,
1999 stated that word empowerment has been derived from different approaches and fields of
study for instance economy, social studies, psychology, education, and organizational studies.
The term “empowerment” is not always clears what does it mean in different industries, sectors

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and organizations also it is elastic. In order to define employee empowerment the history of its
definition starts from 1788 where it can be defined as the conferment of authority and power to
organizational role of the employee. This power and authority of employee should be endowed
to the employee or should be observed in employee's organizational role and responsibilities.
Menon (2001) groups empowerment into three broad groups: situational (structural)
empowerment, motivational (psychological) empowerment, and leadership empowerment.
However, empowerment has been introduced and explained more frequently using two main
alternative perspectives, a structural/relational perspective and a motivational/psychological
perspective.

Employee performance is linked to employees who achieve their tasks and objectives according
to the standard defined by the organization and are evaluated on their performance against
defined performance standards (Chen, 2011).Performance of Employees is a rating system that is
usually used in many companies to evaluate or assess the abilities, skills and effectiveness of
employees(Darden, Babin 1994). Pfeffer (1994) identifies that highly skilled employees are a
major source of high performance and productivity and also give the organization a competitive
advantage. Employee empowerment is important for each and every organization as profitability
and success of organization totally depend on the performance of employees which come from
training, loyalty and empowerment of employees.(Ramlall 2008).

Better employee performance is essential for a balanced economy because high performance
improves will increase the standard of living of employees, their wages increase due to this
increases the consumption of good, because employee performance is essential for today's
society in general (Griffin et al., 1981). In today's business skills, it is essential that almost all
organizations focus on empowering employees so that competent employees can resolve
problems that may arise and make essential decisions in the business environment ( Hanaysha,
2016). Employee empowerment is created by planning an environment in which employees feel
free and are empowered to make their own decisions based on their work situations (Elnaga et
al., 2013).A process of sharing power, responsibility and authority with employees or with
subordinates for the purpose of accomplishing goals and tasks is called employee empowerment
(Wadhwa et al., 2015). According to Hanaysha, 2016 Responsibilities, and authorities increased
by employee empowerment. Also Work life balance is improved through it and employee

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confidence, reduce the stress. Hanaysha, 2106 added that employee empowerment bring
organizational efficiency as all employees perform their tasks more efficiently. Many studies
stated that there is a positive relationship between employee performance and their
empowerment. Tahir et al., 2014 stated that employee Performance means “working effectively
and efficiently or the achievement of something. He further explained that the core or basic
purpose of every company or firm is to increase the overall performance of employees to
maximize profit that can only be possible if performance of employees is enhanced. Sharif, 2002
concluded that performance management is a management tool as it direct and rectify the worries
that organization face about employee performance. Isaac Mwita, 2000 further explained it that
efficient and effective performance of employees improves overall performance of organization.
Also it is important for gaining competitive advantage and achieving desired outcome. Bhat,
2013 explained it as according to former journals, there are various organizational factors such as
teamwork employee empowerment training that can impact their performance. Teamwork is a
group of employees who are members of team who work precisely on a particular and desired
goal using their knowledge and skills (Alan, 2003).According to Hanaysha, 2016 team work is
considered as a group of people working together in order to achieve a common goal or a mutual
objective. While Milliman et al., 2003 defined teamwork as teamwork is composed of
individuals or employees who have different responsibilities and tasks and also they share their
duties with each other in order to increase organizational productivity. According to Jones et al.,
2007 Previous studies expresses that with the help of teamwork employees productivity increase
and they feel empowerment and also produce desired output as compared to individual
productivity. Hartenian, 2003 emphasized on it further that in the current world of business in
order to improve their employees learning and enlarge their abilities employees are allotting
more team projects by managers. According to Randolph (1995) Transmission of power,
authority and also responsibility from management to employees is known as employee
empowerment. While according to Hanaysha, 2106 it is a process of giving power and authority
to subordinates for making decisions related to their roles and certain organizational objectives.
Employee empowerment is a procedure of increasing job satisfaction and involvement that
reduce employee nervousness (Zeithaml et al. (1988).Saifullah et al., 2015 concluded that it is an
important policy that several organizations practice in order to enhance the capabilities and
participation of their employees as empowered employees feel competent in their job

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responsibilities . Jacquiline, 2014 stated that employees who are empowered use their skills and
knowledge in order to perform their roles and tasks appropriately as expected mostly by
enhancing their capabilities.

More than three thousands studies had been done on employee empowerment, employee
commitment and job satisfaction. It has received special attention from organizational and
industrial psychologists, sociologist and, management scientists (Locke, 1976).According to
Richie and Miles, 1970 employees' ego needs will be satisfied and will show more cooperation
as long as they participate and are consulted by top management. Chang and Liu, 2008, in their
research, found that innovative behavior and employee empowerment have a very little impact
on productivity of employees. Usually employee empowerment is explained from two
perspectives, first perspective is explaining it as an action taken by the organizations to make
decisions and share power. The other perspective looks at empowerment as a psychological
attribute. Empowerment is viewed as the perception or attitudes of individuals towards their
work and their roles in an organization (Conger and Kanungo, 1988).Velthouse (1990), building
on Conger and Kanungo’s (1988) motivational approach, described empowerment as an intrinsic
task motivation consisting of four dimensions. These dimensions are meaningfulness,
competence, choice, the impact that psychological empowerment involves the worker’s belief
about the meaning of their work, their capability to do their job well, their sense of choice, and
their autonomy in influencing work outcomes. Kanter (1977) argued that the impact of
organizational structure on organizational behavior is far greater than that of employee
personality predispositions. High performance employees are created in an empowered
organization, and they will increase the organization’s efficiency and productivity (Hammuda
and Dulaimi, 1997). Previous studies also showed that empowered employees were more
effective in getting their work done and contributing to organizational productivity goals
(Laschinger and Wong, 1999; McNeeseSmith, 1996; Sigler and Pearson, 2000) and also
demonstrated better performance in nursing practice (Manojlovich, 2005).Management literature
defines empowerment as a set of managerial techniques, with no attention to its nature or the
processes underlying the construct (Spreitzer, 1995b). Employees may lack psychological
experiences with empowerment, and emphasizing the process of sharing authority may result in
an inadequate understanding of the notion of empowerment and its theoretical rationale for
related practice. Researchers have extended these definitions to include job redesign (Kanter,

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1977), self efficacy by reducing powerlessness (Conger and Kanungo, 1988), and intrinsic task
motivation ( Velthouse, 1990). Combining organizational and psychological domains, employee
empowerment may be viewed as a cognitive state, a psychologically empowered experience with
power-sharing, competence and value internalization in organizations. Spreitzer defined
psychological empowerment as the psychological state that employees must experience for
empowerment intervention to be successful (Spreitzer, 1995a). Based on Velthouse’s (1990)
model, Spreitzer established a psychological empowerments scale, which includes
meaningfulness, impact, competence and choice, with meaningfulness changed to meaning.
Studies have shown that psychological empowerment may be an intervening variable between
organizational empowerment and employee effectiveness (Liden and Wayne, 2000; Spreitzer,
1995b).For purpose of delighting customers and fulfilling their needs empowerment is the only
way.It should be directed toward enriching front line employees with the abilities and skills to
fulfill customers’ requests and needs(Hamborstad and Perry,2011) . As a Consequence,
practitioner and service organizations should try to make better and more efforts in order to
provide customer-contact employees with enough empowerment by increasing their information,
knowledge, training, and trust (Melhem, 2004). Furthermore, Hancer and George (2003) also
found that Employee belief increased by their feelings of psychological empowerment .It help
them to perform their task in better way.

A positive association between psychological empowerment and customer-oriented behavior was

founded by Pecci and Rosenthal (2001). In terms of the dimensional level of psychological
empowerment, three dimensions (i.e., meaning, competences and impact) show a positive and
significant impact on customer-oriented behavior, which is consistent with Pecci and Rosenthal’s
(2001) and Odeh’s (2008) findings. Abu Kassim et al., 2012 stated that from practitioners and
scholars, employee empowerment has received significant attention due to its influence on
organizational effectiveness, productivity, and competitive advantage in every industry.
Organizational changes and intervention occurring under the influence of employee
psychological empowerment will be beneficial to behavioral outcomes such as work flexibility
and creativeness (Thomas and Velthouse, 1990). According to the perspectives described above,
this study used organizational empowerment (Kanter, 1977) and psychological empowerment
(Spreitzer, 1995a) to influence employee empowerment, and added the variable of innovative
behavior to test their relationships to job productivity. In globally challenged circumstances

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order to enforce motivation for the purpose of providing services with high quality it is necessary
to adapt new techniques of management.

Employee empowerment, one of the new techniques utilized by organizations, is receiving much
attention from scholars and practitioners in management (Bernstein, 2003). Employees with
innovative behavior can quickly and appropriately respond to customers, propose new ideas and
create new products (Woodman et al., 1993), and empowered employees can persist despite
pervasive organizational and environmental obstacles (Thomas and Velthouse, 1990). Innovation
is an important indicator of corporate competitiveness (Spreitzer, 1995b).Tuuli and Rowlinson,
2009 stated that relation between employee empowerment and productivity is the supposition
that less empowered employees do not perform better as compared to empowered employees.
Dainty et al., 2002; Liu et al., 2007 argued that employee empowerment increase productivity
because employee’s superior ability help them to resolve issues at operational level without any
delay needed to contact line-managers. Armache, J. (2013) concluded that Empowerment not
only affects employee performance but also affect customer satisfaction and the continuity of the
organization. Empowerment fosters innovation, creativity, motivation and instills shared values
to promote the atmosphere for learning, knowledge and accomplishment. More responsibility
generates greater productivity, and commitment. Armache, J. (2013). Job facet satisfaction
concerns the degree to which employees are satisfied with particular aspects of their job
(Hackman & Lawler, 1971). For frontline service employees, a specific job facet that is
particularly relevant during a service recovery attempt is the opportunity for independent thought
and actions (autonomy). In research on job enrichment, autonomy has been associated with
higher employee satisfaction and work quality (Hackman & Oldham, 1980; Lower, Noe,
Moeller, & Fitzgerald, 1985). Lovelock and Wirtz (2010) have concluded that empowering
employee is one of the most important ways to delight your customers and make long term
relationship with them. In other words, empowerment emerges to give subordinates more
control over job-related situations and decisions, which allows them to have more flexibility and
responsibility with respect to various customers’ needs (Kim et al., 2004). However Pecci and
Rosenthal, 2001 concluded that self-determination did not find in a or significant or positive
influence on the dependent variable, that is contradicting the previous literature. Such
inconsistent findings for the self-determination dimension might be attributed to cultural reasons
and differences .Employee empowerment composed of four different processes these are

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mentioned as follows: Power, knowledge, and information,(Lawler, 1986).In order to explore the
simultaneous influence of the two types of empowerment (structural empowerment and
psychological empowerment) on customer-oriented behavior multiple regression techniques
were undertaken. The results of multiple regressions shows that customer oriented behavior is
influenced by psychological empowerment more than that does structural empowerment. The
reason for such findings may be that a high feeling of psychological empowerment makes
employees more motivated and engaged in more favorable customer-oriented behavior. In other
words, having high feelings of meaningful jobs, having more competences and giving
subordinates more impact on their jobs and organizations will motivate subordinates to service
customers better. On the other hand, having higher levels of structural empowerment might lead
to more formality and rigidity within the organization (Zeglat ,Aljaber, Alrawabdeh, 2014).

Employee empowerment is all about sharing of power and delegation, responsibility or authority
by those in the organizational hierarchy or structure to those lower levels of the organization.
This is the process of decentralizing decision making process in a corporation where managers
give more authority, discretion, and autonomy to the front line managers (Olshfski and
Cunningham, 1998).Wagner (1994) calls employee empowerment as a pattern of steps in which
impact is shared among those people who are otherwise unequal hierarchically. The workers are
empowered in organizations only in the sense that they have a greater authority and
responsibility to act within a narrow sphere and then held accountable for their limited
action( Collins, 1995). Employee empowerment is all about giving or delegating directly to non-
management or lower level employees a significant amount of authority of decision making
which is usually reserved for managers(top management)(Hickey and Casner-
Lotto,1998:58).Additionally they argued a truly supportive organization is characterized by work
systems that are structured to make employee involvement ongoing. Estad, 1997 concluded that
Employee empowerment means the involvement of every employee in organization including
both management and employees ..Participatory management practice that is participatory in a
way balances the managers' involvement and their employees in making decisions, sharing
information and solving problems (Wagner 111, 1994).

Generally Employee empowerment is a great tool that can contribute towards business
development and growth. Business development and growth is largely dependent on customer

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satisfaction (Colwell et al, Yang and Choi, 2009) Morrison, Jones and Fuller (1997) studied the
relationship between leadership styles and empowerment on job satisfaction.

The previous studies have stated that different leadership styles and empowerment can be used
as effective strategy to create job satisfaction in employees. Peters and Mazdarani (2008)
explained impact of employee empowerment on customer satisfaction, customer relationship and
service quality and suggested a positive relationship between them. Furthermore employee
empowerment can also be defined as “To enhance the performance, increase productivity ,and
effectiveness of individuals and work units”. Empowerment does not only mean the delegation
of employees to have decision-making powers, but it also means setting goals and allowing
employees to participate(Ettorre, 1997)In the light of enormous challenges and rapid changes
huge number of organizations and institutions focus on its Human Resource to pursuit the
competitive advantages of organization. That resulted in expressing the interest in the individuals
working in the organizations through implementing the empowerment approach as it has a clear
impact in creating trust between the employees and organization's top management, additionally
solving issues in workplace through delegation of authority and expanding the responsibilities, as
well as reinforcing motivation of employees to participate in the decision-making moving
towards applying the concept of the decentralization effectively(Akhorshaideh, Al-Asoufi,
2017). The concept of employee empowerment started to emerge after the 90th nineties of last
century, it did not emerge quickly but rather was a cumulative and evolutionary result in around
100 years of evolution in different administrative concept (Melhem,2009)

Ettorre, 1997 stated that in order to use employees' creativity in work motivate them, train them,
encourage them and involve them in making decision in order to achieve the strategic goals of
company, and also increase its efficiency and effectiveness in the environment of competition in
proportion to its culture, technological, and environmental capacity. Empowerment is related
with managerial effectiveness, job satisfaction (Spreitzer, 1997), team performance and
creativity(Kirkman and Rosen, 1997) and negatively related to strain(Raub and Robert,2010).
Employee empowerment has a direct link and influence on the performance level of the
employees, and their feel of fulfillment .Application of the empowerment process on a wide
range within the organization lead to success in the long-term run. Therefore employee
empowerment results in a sense of association and commitment to the lower level employees of

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organization In order to keep up with the market trends and changes , organizations have to
constantly develop itself(Al-Haddad and kontour,2015).Organizations that give more attention to
employee empowerment and work on them their employees are comparatively more productive
and effective in performing their tasks. Also these organizations find their employees more
willing .It also help them to accept the participation of any initiative that is carried out in
organization. If employees are not aware of importance of change it cannot happen because they
will resist it(Al-Haddad and kontour, 2015).

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