Impact of Empowerment and Trust on Effective Organizational Development - Research Paper Example

Running Head: EMPOWERMENT Impact of Empowerment and Trust on Effective Organizational Development of the of the Institution] Impact of Empowerment and Trust on Effective Organizational Development Introduction Today, more than ever, the long-term survival of many manufacturing and service organizations is considered to be inextricably linked to the ability of these organizations to produce goods and services that meet or exceed customers' quality expectations. Therefore, organizations are searching for approaches to managing people and production systems in ways that assure the transformation of inputs into quality outputs that meet or exceed customers' expectations. Total quality management (TQM), because of its focus on customer satisfaction, arguably is the most widely discussed approach to directing organizational efforts toward the goal of customer satisfaction. Its tenets are continuous improvement, top management leadership commitment to the goal of customer satisfaction, employee empowerment, and customer focus. Advocates of TQM hold that the goal of customer satisfaction is achieved through top management commitment to creating an organizational climate that empowers employees and focuses all efforts on the goal of customer satisfaction. A positive relationship between leadership and commitment, and employee empowerment (leading to job satisfaction) with customer satisfaction is assumed. Both the trade and academic literatures on TQM suggest many different top leadership strategies and practices for empowering or involving employees in quality-related decision-making processes. However, few empirical studies, outside of the Malcolm Baldridge Award program, have been done to sufficiently document these relationships and to determine which of the many suggested strategies and practices are effective in bringing about the intended results (employee empowerment, job satisfaction, and superior customer satisfaction). The objective of this study is to provide empirical assessment of the assumed relationship between top management leadership and commitment, employee empowerment, job satisfaction, and customer satisfaction. Such assessment should provide guidance to organizations in the design of empowerment and job satisfaction components of their TQM programs. Another objective is to provide empirical assessment for the TQM-based literature. Literature review In almost all of the TQM literature, employee involvement, empowerment, and top management leadership and commitment are identified as crucial elements of a successful TQM program (Bowen, Siehl, & Schneider, 1989; Brower, 1994; Camp, 1989; Deming, 1982; Mendelowitz, 1991; Roberts, 1994; Senge, 1994). Lawler (1994) referred to employee empowerment as one of the most important tenets of TQM. Thomas and Velthouse (1990) define empowerment "as intrinsic task motivation that manifests itself in four cognitions reflecting an individual's orientation to his or her work roles." By intrinsic task motivation, they mean "positively valued experiences that an individual derives directly from a task that produce motivation and satisfaction." The four cognitions they identified are meaningfulness, competence, impact, and choice. Meaningfulness is the value of the task goal or purpose in relation to the individual's own ideals or standards, and competence is the degree to which a person can perform task activities skillfully. Impact, on the other hand, is the degree to which behavior is seen as making a difference in terms of accomplishing the purpose of the task, while choice is the causal responsibility for a person's actions. A more operational-level and process-oriented definition of empowerment was offered by Bowen and Lawler (1992). They define empowerment "as sharing with front-line employees information about an organization's performance, information about rewards based on the organization's performance, knowledge that enables employees to understand and contribute to organizational performance, and giving employees the power to make decisions that influence organizational direction and performance." In Zemke and Schaaf (1989), employee empowerment means turning the "front line" loose, and encouraging and rewarding employees to exercise initiative and imagination. One of the most frequently referenced definitions and constructs of empowerment has been offered by Conger and Kanungo (1988) who define empowerment as "a process of enhancing feelings of self-efficacy among organizational members through the identification of conditions that foster powerlessness, and through their removal by both formal organizational practices and informal techniques of providing efficacy information." This definition implies strengthening the effort-to-performance expectancy or increasing employee feeling of self-efficacy. According to Conger and Kanungo, the effect of empowerment is "initiation and persistence of behavior by empowered employees to accomplish task objectives." These definitions are derived from the management theory of power and authority delegation that gives an employee the right to control and use organizational resources to bring desired organizational outcomes. In practice, employee empowerment centers on strategies or interventions that strengthen employees' self-efficacy or confidence in accomplishing task objectives. The management literature on employee empowerment identifies contextual factors and strategies that promote and support empowerment. For example, Burke (1986) suggests that a way to empower employees is to express confidence in them together with establishing realistic high-performance expectations for them. Block (1987) adds the creation of opportunities for employees to participate in decision-making and giving employees autonomy from bureaucratic constraints as empowerment strategies. Comparatively, Benis and Nanus (1985) suggest the strategy of setting performance objectives for employees that are challenging and inspiring. Also, Hackman, Oldham, Janson, & Purdy (1975), Kanter (1979), Oldham (1976), and Strauss (1977) suggest performance-based reward systems and enriched jobs that provide autonomy and control, task identity, opportunities for career advancement, and task meaningfulness as ways to empower employees. At the organizational level, however, House (1988) and McClelland (1975) suggest that empowerment could be achieved through employee selection and training programs designed to provide required technical skills together with a culture that encourages self-determination and collaboration instead of competition. Thus, in TQM organizations, employee empowerment is operationalized by encouraging employees to respond to quality-related problems and giving them the resources and authority to do so. Also, employees are delegated authority and allocated resources to make quality improvement decisions in their jobs. In manufacturing environments, employees are empowered to accept or reject the quality of work-in-process and finished work (Rubinstein, 1993). To Colzon (1987), the empowerment strategy is to free employees from the rigorous control imposed by instruction, policies, and orders and in their place give employees the freedom to take responsibility for their ideas, decisions, and actions. Obviously, from the preceding discussion, a primary objective of employee empowerment is to create a workforce that is energized by an enhanced ability to produce products or services that meet or exceed internal and external customers' expectations. In the context of TQM, it is generally held that organizations best meet this objective when top management is committed to the goal of customer satisfaction and by creating an organizational climate that emphasizes customer satisfaction. It is generally held also that empowered employees have higher levels of job satisfaction and performance primarily because of their involvement in goal setting and in making decisions that affect their work. Blackburn and Rosen (1993) reported some preliminary evidence of these outcomes in their study of Baldridge Award-Winning Companies. However, other researches have failed to show unconditional relationships between involvement and participation in decision-making and improved performance (Cotton, Vollrath, Froggatt, Lengnick-Hall, & Jennings, 1988). Additionally, Bowen and Lawler (1992) and Lawler (1988) show that the effectiveness of empowerment and involvement in causing improved organizational performance is contingent upon other organizational factors such as a firm's competitive strategies, technology, and the nature of the firm's relationship with its customers. Similarly, studies on the relationship between job satisfaction and performance have failed to show a strong and unconditional link. For example, Iaffaldano and Mucinsky (1985) concluded from their analysis of results from several studies that at best, the relationship between job satisfaction and performance is very weak. Though this finding supports most previous studies, Petty, McGee, and Cavender (1984) found a higher and consistent positive correlation between individual job satisfaction and individual job performance. Also, Bhagat (1982) reported a positive relationship between employee job satisfaction and job performance. However, this relationship is moderated by time and organizational pressures to perform. A stronger relationship between job satisfaction and performance exists only when job satisfaction results in employee organizational commitments that in turn produce desirable organizational citizenship behavior (Williams & Anderson, 1991). This behavior is the willingness of an individual to engage in extra role behavior that is not generally considered a part of an individual's job description. Employee empowerment, organizational culture, and customer satisfaction TQM's primary focus of customer satisfaction, measured by an organization's ability to meet and exceed its customers' expectations, often requires TQM organizations to maintain close contact with customers through postpurchase surveys, sales people, marketing, and customer relations departments (Hauser & Clausing, 1988). Additionally, the customer satisfaction focus requires the interactions between front-line employees and customers to be pleasant experiences especially for the customer. This latter requirement is facilitated by empowered and highly motivated employees who are satisfied with their jobs as a result of their empowerment, involvement, and perception of the emphasis that the organizational culture places on quality. Schlesinger and Heskett (1991) and Schlesinger and Zomitsky (1991) found that employees' perception of service quality positively relates to both job satisfaction and employee self-perceived service capability. Also, Fulford and Enz (1995) found employee perception of empowerment to have an impact on employee loyalty, concern for others (including customers), and satisfaction. The implication of this finding is that enhancing employee service capability through empowerment contributes to employee job satisfaction, job commitment, pride of workmanship, and what Anderson, Rungtusanatham, and Schroeder (1994) called employee fulfillment or the degree to which employees feel that the organization continually satisfies their needs. Related findings reported by Tornow and Wiley (1991) are that employee attitudes -- measured by feelings about reward for performance, work itself, management practices, satisfaction with the company, work group climate, and a culture for success -- are related to customer satisfaction. Here, customer satisfaction is in terms of customer service, product quality, customer orientation, product functionality, and training. These measures of employee attitudes are similar to those of employee job satisfaction. Thus, employee perception of organizational climate and work content (job satisfaction) is related to customer satisfaction. These findings support and extend earlier works of Parkington and Schneider (1979), Schneider and Bowen (1985), and Schneider, Parkington, and Buxton (1980) that showed relationships between customer satisfaction and employee perception of an organizational culture or climate that emphasizes quality. Hypotheses The premise of this study is that the adoption of TQM as a competitive strategy by an organization is a strategic decision. Therefore, it requires top management leadership and commitment to create an organizational climate/culture that promotes employee empowerment and focuses on total quality and customer satisfaction. As Choi and Behling (1997) note, top management leadership is the basis of TQM. It is also one of the criteria in the Baldridge Award. These authors also note that many US companies, including Allied Signal and Xerox, stress the "importance of continuous leadership in the successful implementation of TQM." There is no question, too, that top management leadership roles are essential to employee empowerment. In fact, one cannot empower employees without active top management involvement since empowerment involves power or role sharing. If employees are sufficiently empowered, it could translate into better employee behaviors, which subsequently could lead to increased customer satisfaction. Therefore, we formulate the following hypotheses to express the relationship between the concepts of top management leadership and commitment, and employee empowerment. Hypothesis 1: Top management leadership and commitment to total quality principles of participative management are positively associated with employee empowerment. An underlying feature of this hypothesis is the effect of top management leadership styles and commitment on empowerment. A leadership style can be classified as authoritarian if decisions are centralized, and there is little or no participation of employees in activities such as defining the organization's quality mission, establishing performance goals, determining how work is to be done, or identifying how they are to be evaluated. With this type of leadership style, the potential for TQM's success is quite slim indeed since employee involvement and empowerment cannot be achieved. Comparatively, a democratic leadership style that encourages employee participation is more suitable to employee empowerment and involvement and to the achievement of TQM objectives. Empowered employees have some control over their work, how the work is done, and the quality of the output. They have a great degree of task autonomy and identity. Because both task autonomy and identity are desirable job characteristics, we expect a positive relationship between employee empowerment and job satisfaction. This relationship is expressed in the following hypothesis: Hypothesis 2: Employee empowerment is positively associated with job satisfaction. It must be noted that by this hypothesis, we do not imply that job satisfaction is fully explained by employee empowerment to the exclusion of other factors such as promotion and career development opportunities, equitable reward, and recognition system, working conditions, supportive coworkers, and a challenging job. Employee empowerment is only a partial explanation of job satisfaction. However, if empowered employees are satisfied with their jobs, it may translate into improved product and customer service, which together increase customer satisfaction. A feeling of empowerment, too, may lead to a better job performance that may translate into better customer satisfaction. References Adam, E. Jr. (1991). Quality circle performance. Journal of Management, 17 (1), 25-39. Berry, L. L., Zeithaml, V. A., & Parasuraman, A. (1990). Five imperatives for improving service quality. Sloan Management Review, 31 (4), 29-38. Bhagat, R. (1982). 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