Sharing everyone’s salary might not always be a good idea, but many leaders have found that sharing overall company financial data and allowing people to participate in strate- gic decision making is a great high-level motivator. Angela Lee, a support team coordi- nator at Tenmast Software (which does not share salary data), says knowing where the company stands and understanding her impact on the bottom line is “empowering.”37 Other companies are also giving employees more power, information, and authority to enable them to find greater intrinsic satisfaction.Empowermentrefers to power sharing, the delegation of power or authority to subordinates in the organization.38
Empowerment can enhance motivation by meeting the higher-level needs of employees. In addition, leaders greatly benefit from the expanded capabilities that employee participation brings to the organization.39 Frontline employees often have a better understanding than do leaders of how to improve a work process, sat- isfy a customer, or solve a production problem. To empower followers, leaders pro- vide them with an understanding of how their jobs are important to the organization’s mission and performance, thereby giving them a direction within which to act freely.40 At Ritz-Carlton hotels, employees have up to $1,000 to use at their discretion to create a great customer experience. When homes in the area near the Ritz in Laguna Niguel, California, were evacuated due to risk of fires, the hotel made an exception to its “no-pets” rule. One employee anticipated the need for pet food and drove to the nearest grocery for dog and cat food, making life a little easier for harried guests who were temporarily homeless.41
The Psychological Model of Empowerment
Empowerment provides strong motivation because individuals have a sense that they are in control of their work and success. Research indicates that most people have a need for self-efficacy, which is the capacity to produce results or outcomes, to feel that they are effective.42 Most people come into an organization with the desire to do a good job, and empowerment enables leaders to release the motivation already there. This chapter’s Bookshelf suggests that empowerment works because it addresses three higher-level needs that truly motivate people—the desire for mas- tery, a sense of autonomy, and the need for a driving purpose.
Five elements must be in place before employees can be truly empowered to perform their jobs effectively: information, knowledge, discretion, meaning, and rewards.43
1. Employees receive information about company performance. In companies where employees are fully empowered, as at Tenmast Software, described ear- lier, everyone is taught to think like a business owner. Employees have access to company financials and attend a financial literacy course to understand how to interpret them.44
2. Employees receive knowledge and skills to contribute to company goals. Compa- nies use training programs and other development tools to give people the knowl- edge and skills they need to personally contribute to performance. For example, when DMC, which makes pet supplies, gave employee teams the authority and responsibility for assembly line shutdowns, it provided extensive training.45 3. Employees have the power to make substantive decisions. Empowered employ-
ees have the authority to directly influence work procedures and organizational direction, such as through quality circles and self-directed work teams. At BHP
To see whether you have felt empowered in a job you have held, log in to CengageNOW to complete the interactive questionnaire.
NEW LEADER ACTION MEMO
As a leader, you can give employees greater power and authority to help meet higher motivational needs. You can implement empowerment by providing the five elements of information, knowledge, dis- cretion, significance, and rewards.
CHAPTER 8MOTIVATION AND EMPOWERMENT 241
Empowerment power sharing; the delega- tion of power or authority to subordinates in the organization
Copper Metals in San Manuel, Arizona, teams of tank house workers identify and solve production problems and determine how best to organize themselves to get the job done.46
4. Employees understand the meaning and impact of their jobs. Empowered employees consider their jobs important and meaningful, see themselves as capable and influential, and recognize the impact their work has on customers, other stakeholders, and the organization’s success.47
5. Employees are rewarded based on company performance. Reward systems play an important role in supporting empowerment. People are rewarded based on results shown in the company’s bottom line. Insurer Aflac has a profit-sharing program for all employees, from call center personnel to top leaders.48
Job Design for Empowerment
Leaders can also adjust structural aspects of jobs to enable employees to have more autonomy and feel a sense of meaningfulness and empowerment in their jobs.Job design refers to structuring jobs in a way to meet higher-level needs and increase motivation toward the accomplishment of goals. One model, called thejob characteristics model,
LEADER’S BOOKSHELF
Drive: The Surprising Truth About What Motivates Us
by Daniel H. Pink
Despite much evidence to the contrary, many people still think giving employ- ees more money or other extrinsic rewards is the best way to motivate them. Certainly it is important to pay people well and pay them fairly, but in Drive: The Surprising Truth About What Motivates Us, Daniel Pink provides more fuel for the argument that money is not the best source of increased motivation.
TYPE I AND TYPE X
Pink defines two types of people. Type X (Extrinsic) people are driven by external factors, such as money, fame, status, and soforth.ForTypeI(Intrinsic)people,on the other hand, motivation comes from within, such as the feeling of accomplish- ment when doing something meaningful or the joy one feels in doing a job to the best of one’s ability. Pink suggests that the natural human inclination is toward Type I, but organizations that focus on extrinsic rewards often turn us into Type X people.
Extrinsic rewards could be effective, he says, when most people were doing rou- tine, mechanical, repetitive tasks, but
much of today’s work is more complex, creative, and knowledge-based. For this, leaders need a new approach.
HOW TO MOTIVATE NOW:
PROVIDE A MAP
Too much focus on extrinsic rewards can kill intrinsic satisfaction. Pink says leaders can enhance motivation by pro- viding three critical conditions.
• Mastery. “We have an innate desire to grow and develop—to become really good at something,” Pink asserts. Mastery leads to a sense of personal fulfillment. Leaders encour- age mastery when they give people time to learn and stretch themselves and when they provide feedback that enables employees to improve.
Unfortunately, the modern work- place is “one of the most feedback- deprived places in American civiliza- tion,” he says.
• Autonomy. Perceived control is an important component of one’s happi- ness and well-being. Leaders should set goals, provide the tools and
resources people need, and then give people discretion over how they accomplish the goals. Zappos, for example, has no scripts for call center employees, does not monitor calls, and lets people decide for them- selves how to handle complaints.
• Purpose. For people to be moti- vated, they need to work toward an inspiring purpose. Enriching shareholders isn’t going to make most people want to get out of bed in the morning, much less give their best at work. Leaders define a purpose that employees can believe in and want to be a part of.
The last section ofDriveprovides a toolkit with specific tips and techniques for implementing the principles in the real world of organizations. Money and other extrinsic rewards have their place, but for Pink, “the best use of money as a motivator is to pay people enough to take the issue of money off the table.”
Source:Drive, by Daniel H. Pink, is published by Riverhead Books/Penguin Group.
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© Guy Edwardes/Stone/Getty Images
Job design
structuring jobs in a way to meet higher level needs and increase motivation toward the accomplishment of goals Job characteristics model
a model of job design that considers the core job di- mensions of skill variety, task identity, task significance, autonomy, and feedback to enrich jobs and increase their motivational potential
Find more at http://www.downloadslide.com
proposes that certain core job dimensions create positive psychological reactions within employees that lead to higher motivation and better performance.49The core job dimen- sions, related psychological reactions, and outcomes are illustrated in Exhibit 8.8.
Leaders can make alterations in five dimensions of jobs to increase the job’s motivational and empowerment potential.
1. Increase skill variety. Jobs with a variety of activities require a diversity of skills and are thus more motivating.
2. Structure jobs so that an employee can perform a complete task from beginning to end. The job characteristics model refers to this as task identity, which means the job has a recognizable beginning and ending.
3. Incorporate task significance into the job. People feel an increased sense of power and self-efficacy when they are performing a job that is important and that influ- ences customers and the company’s success. At The Nerdery, a Web development firm, leaders gave all employees the job title of co-president, which increases task significance for every job because it gives everyone both the freedom and the responsibility to do what is best for customers and the company.50
4. Give people autonomy for choosing how and when to perform specific tasks.
People are typically more motivated when they have freedom, discretion, and self-determination in planning and carrying out tasks.
5. To the extent possible, design jobs to provide feedback and let employees see the outcomes of their efforts. In cases where the job itself does not provide timely feed- back, leaders have to work harder at giving people specific feedback and helping them see how the job contributes to the organization’s success. For example, James Ault spends his days researching and debating issues related to state energy policy and might never see concrete results of his work. Consequently, Ault sometimes finds it difficult to get gratification from his job. “It would be nice to be an electri- cian,” he says. “You can take pride in what you’ve accomplished.”51
The more these five characteristics can be designed into the job, the higher employ- ees’ motivation will be, and the higher will be their performance. Essentially, these
EXHIBIT 8.8 The Job Characteristics Model
Source: Adapted from J. Richard Hackman and G.R. Oldham, “Motivation through the Design of Work: Test of a Theory,”Organizational Behavior and Human Performance16 (1976), p. 256.
To evaluate a job according to the job characteristics model, log in to CengageNOW to complete the interactive questionnaire.
CHAPTER 8MOTIVATION AND EMPOWERMENT 243
changes are designed to transfer authority and responsibility from leaders to employees and create job enrichment. Job enrichment incorporates high-level moti- vators such as responsibility, recognition, and opportunities for growth and learn- ing into the job. In an enriched job, the employee controls resources needed to perform well and makes decisions on how to do the work.
The following example describes how leaders at Ralcorp’s cereal manufacturing plant in Sparks, Nevada, used job design to enhance employee empowerment.
IN THE LEAD
Ralcorp
One way to enrich an oversimplified job is to enlarge it, that is, to extend the responsibility to cover several tasks instead of only one. At Ralcorp’s cereal manufacturing plant, leaders combined several packing positions into a single job and cross-trained employees to oper- ate all of the packing line’s equipment. Employees were given both the ability and the responsibility to perform all the various functions in their department, not just a single task.
In addition, line employees became responsible for all screening and interviewing of new hires as well as training and advising one another. They also manage the production flow to and from their upstream and downstream partners—they understand the entire production process so they can see how their work affects the quality and productivity of employees in other departments and the success of the company. Ralcorp invests heavily in training to be sure employees have the needed operational skills as well as the ability to make decisions, solve problems, manage quality, and contribute to continuous improvement.52
Leaders at Ralcorp applied elements of job design to enrich jobs, which has improved employee motivation and satisfaction. The company has benefited from higher long-term productivity, reduced costs, and happier employees.
As illustrated in Exhibit 8.8, the five core job dimensions cause individuals to experience three positive psychological reactions. The first three dimensions—
higher skill variety, task identity, and task significance—enable the employee to see the job as meaningful and significant (experienced meaningfulness of work), which makes the job intrinsically satisfying. Greater autonomy in a job leads to a feeling of increased responsibility for the success or failure of task outcomes (expe- rienced responsibility for outcomes of the work), thus increasing commitment. The final dimension, feedback, provides the employee with knowledge of the actual results of work activities. Thus, the employee knows how he or she is doing and can adjust work performance to increase desired outcomes.
These positive psychological reactions in turn lead to greater intrinsic satisfac- tion, higher motivation, better work performance, and lower absenteeism and turn- over, as illustrated in the exhibit.
Empowerment Applications
Current methods of empowering employees can be classified based on two dimensions:
(1) the extent to which employees are involved in defining desired outcomes; and (2) the extent to which they participate in determining how to achieve those outcomes.
Exhibit 8.9 shows that empowerment efforts range from a situation where frontline
244 PART 4THE LEADER AS A RELATIONSHIP BUILDER
Job enrichment a motivational approach that incorporates high-level mo- tivators into the work, in- cluding job responsibility, recognition, and opportu- nities for growth, learning, and achievement
Find more at http://www.downloadslide.com
employees have no discretion (such as on a traditional assembly line) to full empower- ment where workers even participate in formulating organizational strategy.53
When employees are fully empowered, they are involved in defining mission and goals as well as in determining how to achieve them. One organization that has moved to this high level of empowerment is Hilcorp Energy, the nation’s fourth-largest private producer of onshore crude oil and natural gas, based in Houston, Texas. Hilcorp, which takes over holes abandoned by the big energy companies and produces about 25 million barrels of oil and gas a year from them, was started by three guys with nothing but a telephone in 1989 and has grown to more than 600 employees (called associates). Managers attribute the company’s success to the people on the front lines. Because managers put decision-making power is in the hands of associates, those people need full information to make good choices, so all financial and operating information is openly shared. Associ- ates at Hilcorp are also rewarded based on company performance. Associates can earn bonuses of up to 60 percent of their annual salaries based on meeting perfor- mance goals. In addition, they can choose to purchase an economic stake in one of Hilcorp’s reclamation projects. At Hilcorp, employees truly do feel like owners.54