Actions Taken by Management to Combat Recessions may Jeopardize the Performance Benefits of Empowerment

Wage and employment restrictions, as well as other measures implemented to address recessions, may jeopardize employee empowerment’s good impact on employee morale and, as a result, performance.

These are the findings of a recent research published in the Journal of Management by Professor Stephen Wood of the University of Leicester and Chidiebere Ogbonnaya of the University of East Anglia.

Their research indicated that giving workers the authority to make decisions had a significant impact on their job satisfaction and well-being, both at work and in general. Indeed, one of the clearest links in the social sciences is that between occupational autonomy and well-being, as well as the consequences for health (as well as medicine).

There is also compelling evidence that empowerment improves individual and organizational performance, with worker morale playing a key role. However, traditional management actions during recessions, such as salary and employment freezes, substantial job reorganization, and work intensification, may have a detrimental impact on employee morale and dedication.

Through participating in organizational involvement activities workers may have more information and a greater certainty about the future.

Stephen Wood

‘Moving decision-making authority down the (conventional) organizational structure’ is what empowerment entails. It’s a broad term that may refer to a variety of initiatives that can be used at all levels of a business, from the shop floor to middle and upper management.

According to the findings, these negative impacts lessen the beneficial benefits of giving employees autonomy, discretion, and diversity in their job to both employees and employers. Recessionary initiatives have the unintended consequence of reducing the effectiveness of individual-level employee participation. As a result, the performance consequences of empowerment are reduced.

The consequences of recessionary acts on organizational-level participation through teamwork, problem-solving groups, idea-capture systems, and information-sharing are not the same. This type of participation has a good impact on organizational performance, but it has minimal impact on employee happiness or well-being.

In workplaces with significant levels of organizational engagement, the amount of job discontent and ill-health caused by recessionary activities was actually lower. The focus of empowerment had shifted away from the employee’s or group’s job function and toward a more inclusive approach, as well as from increased autonomy and control over immediate work to include participatory forms of leadership and management.

Stephen Wood suggests that “through participating in organizational involvement activities workers may have more information and a greater certainty about the future.”

The findings are based on information from 11,538 employees in 1,119 organizations who completed questionnaires as part of the government-sponsored British Workplace Employment Relations Survey (WERS) in 2011. For the first time in the survey series, questions about what steps employers took in light of the recession and what employees directly experienced during the post-2008 recession were included in the 2011 WERS.

A total of 55 percent of participants saw at least one activity, with 31 percent seeing two or more and 24 percent seeing only one. The most often reported actions were wage freezes or cutbacks (35 percent), increased workload (28 percent), and job rearrangement (21 percent).

The study’s findings suggest that there is a conflict between empowerment and recessionary activities, but that organizational engagement may help to alleviate some of the negative impacts of recessionary actions on employee morale.

The study validates the importance of participation at both the person and task levels, as well as at the organizational level, and suggests that it should be given more consideration in the productivity discussion. Indeed, it’s possible that this is so powerful that there’s no true productivity problem, only a failure to recognize the value of employee participation.