5 Ways Empowerment Does (and Does Not) Increase Productivity

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When does empowerment become counterproductive to a manager or leader?

--Anonymous

Thank you for your intriguing question.  Current fashion in leadership education and research typically indicate that empowerment is always a good thing.  As the question suggests, perhaps this is not the case.  But before predicting when empowerment is good—or not so good—for a leader, it is important to first define what is meant by empowerment.

Empowerment has many definitions but most, at least with respect to organizations, cluster around two different meanings.  First, in its simplest and most common form, empowerment means to invest someone with authority, to authorize.  In other words, empowerment involves a superordinate—a boss—assigning to an individual or team, decisions rights over resources (time, physical resources, money) so that they make decisions about what to do and how to respond to specific situations without checking in with the boss.  This perspective of empowerment assumes a hierarchical organization in which decision rights are “pushed” down the hierarchy.

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Contrary to much of the leadership literature, empowerment may not always yield performance improvements for an organization.  If empowerment yields lower efficiency in the short and long run then it is counterproductive for organizations.  To figure out this counterproductivity, let’s begin by first understanding when empowerment is productive.

With two colleagues, I studied a garment facility that shifted from individual piece rates (a price paid to a worker for each sewing operation performed) to group piece rates (a price for sewing the entire garment split equally among a team).^*  In essence, management empowered the team to make all production decisions in sewing where under the prior situation individuals were assigned a specific and narrow repetitive task like sewing inseams.  Overall, empowering autonomous work teams led to a stunning 14% productivity improvement over individual production and, arguably, a better culture and work environment.  In a fascinating twist, the most productive individual workers essentially took a pay cut of up to 40% to work on empowered teams, presumably because they enjoyed them more than working alone!  From the study can be deduced five sources of improved productivity from empowerment.

When can empowerment improve productivity?

1. Empowerment at the garment facility yielded greater productivity for most but not all teams.  Most workers enjoyed working with others and demonstrated collaboration skills.  But a few teams declined substantially in productivity.  These workers seemed not to enjoy being on a team and did not display collaboration skills.  Empowerment in teams may require individuals who enjoy working with others and who possess collaboration skills.
2. Empowerment of teams led garment workers to productively use and share their individual information and knowledge, which seemed superior to that possessed by management, to increase productivity.  Empowerment therefore may be useful when workers have superior information and knowledge.
3. Team output was easily, comprehensively, and precisely measured.  With accurate and precise measurement and feedback for the team and management, empowerment may make it easier for teams to improve productivity.
4. Team members could easily monitor each others’ contributions and effort.  Empowerment and easy peer monitoring may encourage social punishment of any member who deviates from the norm.
5. The team had an incentive—in this case income—to collectively improve performance.  Empowerment and strong enough incentives may generate both a high performance norm and the motivation to achieve it.

These five features explain why team empowerment worked brilliantly at the garment facility.  Turning these features on their head helps to identify when empowerment might be counterproductive.

When can empowerment be counterproductive?

1. Empowerment may not be advantageous in a team setting if individuals aren’t interested in working with others or do not possess collaboration skills. 
2. Authority is a better form of organization if leadership has costly-to-transfer and superior information and knowledge not possessed by subordinates.  In this case, command and control can deliver superior organizational performance.
3. When team output cannot easily be measured then greater oversight of effort and adherence to specific process steps are called for, assuming leadership can observe effort and verify process steps.
4. If team members cannot easily monitor each other’s actions and aren’t motivated to do so then it becomes easy for each worker to take it easy and shirk. 
5. Without an incentive—financial, career, acknowledgement, status, some form of socialization, etc.—it may be difficult for teams to adopt a high performance norm, a common goal, and have motivation to achieve them.

In my view, empowerment is a useful leadership approach for most situations.  Nonetheless, it isn’t always the best option as applying it in some situations can be counterproductive.  A challenge for leadership, and in government in particular, is finding ways to structure work so that empowerment offers a superior approach.  Doing so not only can lead to substantial productivity gains but also create a superior organizational culture and work environment.

Duce a mente (May you lead by thinking),

Jackson Nickerson

^* Barton Hamilton, Jack Nickerson, and Hideo Owan (2003). “Team Incentives and Worker Heterogeneity:  Empirical Analysis of the Impact of Teams on Productivity,” Journal of Political Economy (111,3): 465-497.

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