Why Employee Empowerment Should Be More Than Just A Buzz Word At Your CU

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Empowerment in the workplace is an often-misunderstood concept. Employee empowerment is a term that many managers and organizations think they understand, but few actually do, and even fewer really put into practice.

Many managers feel that by empowering employees, they relinquish the responsibility to lead and control the organization. This is not the case. Empowerment is actually a culmination of many of the ideas and tenets of employee satisfaction that are discussed and analyzed frequently in a variety of books and periodicals focused on the subject.

For an organization to practice and foster employee empowerment, the management must trust and communicate with employees. Employee communication is one of the strongest signs of employee empowerment in an organization. Management must be willing to communicate every aspect of the business to its employees in an open and honest manner. This communication may include: elements of the strategic plan, financial performance, key performance indicators, and daily-decision making. Employee empowerment has been described and defined in many ways but is generally accepted as the process of enabling an employee to think, behave, act, react, and control their work in more autonomous ways, as to be in control of one’s own destiny. Effective employee empowerment not only has positive implications for employee satisfaction, but also many other organizational facets, such as member service and member retention.

A great deal of managerial discussion has centered on the need to empower employees and give them a sense of ownership and pride in their work. Options have included flattening organizational pyramids and using team management. The common denominator, which many institutions are seeking and few actually achieve, is the need to create an entrepreneurial spirit within the company. Traditionally, entrepreneurship has been thought of as a concept of independence and self-direction, a concept that is diametrically opposed to the process of a synergistic organization. However, the concept of entrepreneurship has been employed in successful organizations and is often referred to as “corporate entrepreneurship.” Corporate entrepreneurship focuses on ways to encourage entrepreneurial activities in corporations, and seeks to identify relevant factors associated with corporations that exhibit characteristics most often associated with the individual entrepreneur. The concept of corporate entrepreneurship is becoming more important to organizations everywhere as the need increases to retain good employees, while at the same time needing to constantly compete and innovate.

Empowering employees leads to organizational encouragement of entrepreneurial traits and prompts employees to make decisions, take action, and foster their belief that they can take control of their own destinies. This belief leads to self-motivation and a sense of independence that is translated into greater loyalty and extra effort for the organization. Empowered employees come to believe that they control their own success through their efforts and hard work, which in turn benefits the success of the entire institution.

The most important factor in effective employee empowerment is bilateral communication. Employee surveys and evaluations show repeatedly that empowerment and communication rate highest in regard to employee satisfaction in an organization. Companies committed to employee empowerment provide more information in greater detail than the average company. Empowering employees to increase their satisfaction and the organization’s performance will require a greater amount of communication than ever thought possible. This will require management to invest in increased amounts of time communicating to employees and allowing for feedback. In addition, it will require that management honestly evaluate the communication styles and methods that are being used in the institution to ensure the most efficient processes possible. Communicating and sharing information accomplishes several objectives that are not only important for the empowerment process, but also for overall employee satisfaction with the organization. The sharing of information lets people understand the current organizational situation in clear terms. It begins to build trust throughout the organization and breaks down traditional hierarchical thinking. It helps people to be more responsible; without information, people cannot monitor themselves or make sound decisions–people with information can. Sharing information encourages people to act like owners of the organization, which is a foundational tenet of the credit union community.

It is also important to remember that communication must work both ways. That is to say, employees must be allowed to have a say in issues that they are required to work with. This includes the opportunity to offer ideas and solutions to situations that may confront the organization. An important factor to consider when discussing idea generation is the treatment of the people involved in the process. It is vital that the participants receive feedback and feel that they have ownership in the process. People must know that their ideas will be listened to and, if they have merit, acted upon. When management exhibits this kind of behavior, they serve to stimulate individual motivation and creativity on a broad scale throughout the organization. Making sure the participants in the process are treated fairly and as equal partners is a key to successful innovation and creativity that translates into effective empowerment.

Dr. Anthony L. Emerson is CEO of the Connecticut Credit Union Association.

Everyone involved in the process must believe that anything is possible and that exploring new paradigms and ways of thinking are the goals. Fear of failure and retribution for unsuccessful ventures cannot be presented as impediments to the process. The fastest way to ensure that innovation will not work in an organization is for management to punish innovation when it does fail to yield the intended result. One last note about the people involved in the process is in regard to the hiring of the people themselves. Far too often we hire people in our own image. By doing this, we inadvertently create a uniform, standard line of thinking and methodology. It may sound obvious, but one of the easiest ways to create and innovate in an organization is by hiring creative and innovative people.

Employee empowerment requires a strong and lasting commitment from an organization’s management. A pervasive misconception in relation to employee empowerment is that it is a top-down desire. Employee empowerment comes from the individual. That is not to say that management ceases to have the responsibility to lead the group and is not responsible for performance. In fact, companies that seek to empower employees demand stronger leadership and accountability. This begins with executive leadership, through all management levels and includes frontline supervisors. Successful employee empowerment initiatives require the entire organization to work together as a team in order for the benefits to be realized. It is up to the management of an organization to lead the empowerment process, even though it is most likely the employees that are advocating the issue. Clearly, empowerment is neither quick nor easy, except in the case of a newly formed organization where the leaders understand it and have committed themselves and the organization to it. Because of this, empowerment initiative implementation in an established organization requires a plan of action, as well as a clear understanding of what is to be achieved.

Employee empowerment is an acknowledgment by an organization’s management that they realize that their employees have a lot to offer. Employees derive satisfaction from many aspects of employee empowerment endeavors, not the least of which are the corresponding benefits that allow an organization to become more competitive, profitable, and innovative. An organization can realize many benefits from learning how to properly empower its employees; not all of which are strictly monetary. An empowered employee helps a company improve service delivery, continuously become more innovative, increase productivity, and gain a competitive edge. Traditional top-down management tends to stifle worker productivity, create barriers to innovative solutions, and adversely affect employee satisfaction. Employee empowerment utilizes a participatory management style that requires a great deal of employee involvement to be successful. An organization that embraces the concept of employee empowerment redefines traditional workplace democratization in both terms of scope and role of the employee in the decision-making process.

The government has also researched the benefits of empowering employees. In a 2005 review of 100 workplace studies, the U.S. Department of Labor examined the link between progressive employment practices and improved bottom line results. The Department found that a positive correlation exists between motivating and empowering employees and significant improvements in productivity, employee satisfaction and financial performance. Many employees that are not empowered by their organizations feel underutilized, micro-managed, and helpless to make positive changes. These feelings and attitudes not only adversely affect the employee, but also the organization. As has been stated before, research has shown that empowered employees improve organizational performance and possess higher rates of satisfaction. In a highly competitive industry, mired in uncertain economic turmoil, organizations are searching for any competitive advantage they can find. Empowered employees are proven to provide a very strong competitive advantage to their organizations by understanding and supporting management’s strategy, and thereby more easily carrying out the duties necessary to achieve them.

A good lens by which to examine the employee and organizational benefits of employee empowerment is through the members of the credit union. It is a well-known fact that CUs that are truly successful in delivering exceptional member service have several traits in common, one of which is employee empowerment. In simple terms, organizations that empower member service representatives, allow them to make decisions that promote and enhance member satisfaction.

There are now many companies that tout employee empowerment as a selling point to prospective customers. They advertise the fact that the employee empowerment philosophy allows their employees several important capabilities, including the ability to respond intelligently and independently to customer needs, and make critical decisions on-the-spot. Since our society has become a “service” related society, with a service-based economy, empowering employees to make member service-related decisions is imperative to organizational success. Service company employees must exercise greater individual judgment than their counterparts in manufacturing firms when providing service to customers because often the customer is a participant in the service process. By using this reasoning, one can easily see that empowering employees to make member service related decisions will result in the satisfaction of the member, employee and subsequently, the organization.

In addition to the employee, organizational and member benefits already cited here, employee empowerment holds added benefits and outcome for employees. One of the measures of success for any organization is the personal growth and development of its employees. Empowerment allows employees the added opportunity to build on their current skill set. Being empowered gives them the ability to use all the skills that they already possess as well as gain new skills and experiences. Being able to hone and exercise their creativity and innovation skills will benefit them as they progress to higher positions within the organization. When encouraged with care, empowerment is a panacea for many organization ills. All managers and employees say they want empowerment, as it is considered a strategy to develop employees and serve members, which in turn will serve the credit union

Dr. Anthony L. Emerson is CEO of Connecticut Credit Union Association.


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