ChapterPDF Available

Empowerment and Performance

Authors:
Chapter

Empowerment and Performance

Abstract and Figures

IntroductionEmpowerment Research: A Brief History in ContextPsychological EmpowermentRole EmpowermentOrganizational EmpowermentEmbedded EmpowermentConclusions and Future DirectionsReferences
Content may be subject to copyright.
Chapter 1
EMPOWERMENT AND PERFORMANCE
Toby D. Wall, Stephen J. Wood, and Desmond J. Leach
Institute of Work Psychology, University of Sheffield, UK
INTRODUCTION
In the last decade the notion of empowerment has become popular in I/O
psychology and management circles. Its currency among practitioners can be
illustrated by the view of a CEO who stated that ‘No vision, no strategy can
be achieved without able and empowered employees’ (cited in Argyris, 1998,
p. 98). Concurrently, a survey based on a representative sample of 564 UK
manufacturing companies (Waterson, Clegg, Bolden, Pepper, Warr, & Wall,
1999) showed that, although only 23% reported using empowerment exten-
sively, 72% had adopted empowerment initiatives to at least some degree,
had done so within the last few years, and had planned to develop them
further.
Similar rates of adoption have been reported in Japan, Australia and
Switzerland (Clegg, Wall, Pepper, Stride, Woods, Morrison et al., 2002),
and in the USA (Lawler, Mohrman, & Ledford, 1998). Evidence of the
continued increase in the use of empowerment in the UK comes from a
study by Wood, Stride, Wall, and Clegg (2003). They followed up on the
companies in Waterson et al.’s (1999) manufacturing sample four years later,
and found that the proportion using empowerment extensively had nearly
doubled. They also found more use of empowerment in service organizations
than in manufacturing ones. Hardy and Lieba-O’Sullivan’s (1998) verdict
that ‘the popularity of this latest approach led some writers to hail the 1990s
as the ‘‘empowerment era’’ ’ (p. 452) extends into the new millennium.
Fenton-O’Creevy (1995) notes that ‘prior to its adoption as a management
term, the word empowerment was most often used in such fields as politics,
social work, feminist theory, and Third World aid ... to mean providing
individuals (usually disadvantaged) with the tools and resources to further
their own interests’ (p. 155). Within I/O psychology and management, em-
powerment typically has a more restricted meaning. It is used to denote the
International Review of Industrial and Organizational Psychology, 2004 Volume 19
Edited by C. L. Cooper and I. T. Robertson. #2004 John Wiley & Sons, Ltd.
enhancement of employees’ autonomy in their work, or increased involve-
ment and influence in decision-making more generally, within the wider
agenda and interests of the organization. Thus it loses the emphasis on
empowerment furthering employees’ own interests, though many assume
they value greater empowerment. In other words empowerment involves
‘moving decision-making authority down the (traditional) organizational
hierarchy’ (Menon, 2001, p. 156). Empowerment is a generic construct
that can encompass a family of different initiatives, and can apply at all
levels within the organization from shop floor to middle and relatively
senior management (see also Robbins, Crino, & Fedendall, 2002).
Four main perspectives on empowerment are evident, each of which has its
own distinctive literature. One is that of psychological empowerment (e.g.,
Conger & Kanungo, 1988; Thomas & Velthouse, 1990), where the emphasis
is on individual cognitions of self-determination, competence, and related
constructs. This is an experiential or subjective perspective, concerned
with how empowered employees feel.
In contrast, the remaining three perspectives on empowerment are more
directly rooted in the autonomy or influence afforded by the environment
within which people work, and collectively are thus sometimes described as
‘situational’ or ‘structural’ forms of empowerment (see Spreitzer, 1995a).
The second we shall call role empowerment to reflect the fact that it focuses
on the delegation of added responsibility to individuals or groups for the
execution and management of their own primary tasks. This is what
London (1993) defines as ‘ensuring the employee has the authority to do
his or her job’ (p. 57). Examples include job enrichment and self-managing
work teams.
The third perspective, organizational empowerment, encompasses the
involvement or representation of employees in decision-making within the
wider enterprise. Examples include consultation and participation, styles of
management fostering these, as well as representation on bodies such as
management boards and through trade unions. Such practices have been
rather neglected in the I/O literature in recent times, but they have been
more prominent in the management and industrial relations fields.
The final perspective that we identify we call embedded empowerment. This
refers to initiatives in which role or organizational empowerment is a core
component within a wider framework. The topical example on which we will
focus is work on human resource management (HRM). This is concerned
with the effects of the HRM system as a whole, within which, role and
organizational empowerment typically play a central role alongside other
factors, such as investment in selection and training. Such systems are
often labelled accordingly (e.g., ‘high involvement management’) (Wood,
1999).
In this chapter we critically review evidence relating to each of these four
perspectives on empowerment as they bear upon performance at work. We
2
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
use the term performance to denote the achievement of the primary economic
task (e.g., output in manufacturing, volume in sales). We do not include
broader considerations such as employee welfare or social and environmental
responsibility, as represented within the more general ‘balanced score card’
approach (e.g., Daft, 1998). The focus on economic performance, however,
means that the outcome differs according to the perspective on the em-
powerment in question. Thus for psychological and role empowerment,
performance is typically concerned with job or team output; whereas for
organizational and embedded empowerment the focus is on the performance
of the organization as a whole in terms of such measures as productivity,
profit, or return on assets. We conclude by attempting to integrate findings
from the four perspectives on empowerment and to identify issues for future
research and practice. First, however, to set the scene, we offer a brief history
of empowerment research and an outline of the wider socio-political influ-
ences affecting interest in the topic.
EMPOWERMENT RESEARCH:
A BRIEF HISTORY IN CONTEXT
It is only recently that the term empowerment has become popular, and
arguments could be mounted about the distinctiveness of some contemporary
approaches (such as psychological empowerment). However, as most com-
mentators observe (e.g., Arnold, Arad, Rhoades, & Drasgow, 2000), interest
in situational empowerment, and especially in role empowerment, has a long
history. The study of psychology and management in work settings devel-
oped in the early part of the 20th century, against the backdrop of scientific
management (Taylor, 1911). That approach focused on role disempower-
ment by promoting narrowly defined, low discretion jobs, and the concentra-
tion of decision-making in the upper reaches of the management hierarchy.
Although scientific management brought immediate productivity benefits,
there was concern about the longer term value, and particularly about the
social and psychological costs of the resultant work simplification. During the
1920s criticism of the practice was voiced in political circles on both sides of
the Atlantic (Rose, 1978). Consequently, much early investigation, such as
that funded by the Industrial Fatigue Research Board in the UK, was
devoted to investigating its effects on employee well-being (Wall & Martin,
1987). That research helped create and shape the field of study that was to
become I/O psychology in the US and occupational psychology in the UK. It
led to recommendations for broadening the range of tasks within jobs and,
less noticeably at first, for devolving more authority to job holders. This gave
rise to interest in role empowerment in the form of job redesign, as the
antithesis of scientific management or work simplification.
E
MPOWERMENT AND
P
ERFORMANCE
3
The subsequent history of I/O psychology and related fields reveals per-
sistent advocacy of empowerment, albeit in a variety of different forms and
levels of analysis. As Wilkinson (1998) notes, elements of role empowerment
are evident within the human relations movement prominent in the 1920s
and 1930s, inspired by Elton Mayo’s Hawthorne studies. Those studies
involved field experiments on the effects of work conditions (e.g., hours of
work and payment incentives) on performance (Roethlisberger & Dickson,
1939). Unexpectedly, the investigators found performance benefits not only
when they improved work conditions but also when they subsequently
reduced them. This led to the conclusion that the process of experimenting
had empowered employees in that ‘supervision was free and easy, the opera-
tives were able to set their own work pace [and that it was] an increased
involvement in the job [that] was reflected in a steady improvement in
production’ (Warr & Wall, 1975, p. 30).
The human relations movement in turn encouraged a broadening of the
perspective to include empowerment within work groups, leadership style,
and wider oganizational structures. For example, that movement was soon
followed by the development of socio-technical systems theory in the UK
(e.g., Trist & Bamforth, 1951) that promoted role empowerment at the team
level, through the advocacy of autonomous working groups (now variously
called semi-autonomous, self-managing, or empowered groups or work teams
(see Arnold et al., 2000, p. 249)). Commensurate with their respective cul-
tures, the work group emphasis that emerged especially in the UK was
paralleled by a continuation of the more individualistic approach in the
US, where Herzberg (1966) advanced his two-factor, or motivation–
hygiene, theory of work design. He coined the term ‘job enrichment’ to
reflect its advocacy of increasing individual employee autonomy and respon-
sibility. The same term was subsequently adopted by Hackman and Oldham
(1976), whose Job Characteristics Model led to similar recommendations for
job design.
There were parallel developments with respect to organizational empow-
erment. Pursuing the human relations theme of the role of leadership style,
McGregor (1960) contrasted ‘Theory X’ (Taylorism) with ‘Theory Y’ (em-
powering) management approaches, recommending the latter as a means of
enhancing performance. Likewise, Likert (1961), focusing on ‘new patterns
of management’, compared System I, defined in terms of close control and
lack of delegation, with systems II, III, and IV, representing progressively
greater empowerment. The focus of empowerment had broadened from the
work role of the employee or work group towards a more inclusive approach,
and from enhanced autonomy and authority over the immediate work to
include participative forms of leadership and management.
The interest in organizational empowerment gained further momentum in
the 1960s, fuelled by national and international political initiatives. In the
UK, for example, the tenor of the times was captured by the Report of the
4
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
Royal Commission on Trade Unions and Employee Associations (Royal Com-
mission, 1968), which states ‘the right to representation in decisions affecting
[work] is, or should be, the prerogative of every worker in a democratic
society’ (paragraph 212). Similarly, the Trades Union Congress (TUC)
report to that Royal Commission recommended: ‘provision should be made
at each level in the management structure for ... representatives of the work
people employed in these industries to participate in the formulation of
policy and in the day to day operation of these industries’ (TUC, 1966,
p. 262). Within Western Europe more generally, the Draft Fifth Directive
of the European Economic Community (EEC, now the European Union,
EU) recommended a representative system at board level within companies.
As Towers (1973) observed, ‘Over the last few years powerful socio-cultural,
political and industrial pressures have coalesced to articulate themselves into
a widespread demand for greater participation and democratization’ (p. 7). In
Western Europe that was reflected in research on industrial democracy and
participation (e.g., Emery & Thorsrud, 1969; Poole, 1986). In the US inter-
est did not expand from role to organizational empowerment to the same
extent, with attention to the latter largely restricted to more general
notions of participative decision-making (e.g., Locke & Schweiger, 1979)
and employee ‘voice’ (e.g., Freeman & Medoff, 1984).
Arguably, the period from around 1980 to the early 1990s saw a lull in the
interest in empowerment. With the election of Margaret Thatcher as Prime
Minister in the UK, there was legislation to restrict organizational empower-
ment through trade unions, and ‘managers’ right to manage’ became a slogan.
In Europe, the Draft Fifth Directive was never enacted. There was a retreat
from empowerment philosophies. As Wilkinson (1998) notes, ‘The rhetoric
of enterprise moved to the right in Western Europe and the USA’ (p. 42).
Nonetheless, advocacy of empowerment did not disappear, especially
within the popular management literature, and developments since have
served to renew interest. As Wilkinson (1998) argues, Peters and Waterman’s
(1982) best-selling book, In Search of Excellence, ‘was influential in laying the
foundation for the modern empowerment movement’ (p. 42), and promoted
interest in empowerment as a core element of total quality management
(Wilkinson, Marchington, Ackers, & Goodman, 1992). Empowerment is
implicit in various concepts that were gaining ground in the 1980s, such as
post-Fordism, flexible specialization, de-bureaucratization, delayering and
decentralization, as reflected in prescriptive management approaches pro-
moted by such writers as Drucker (1988) and Kanter (1989). Influential
books making the case for an empowerment approach (e.g., Lawler, 1992;
Pfeffer, 1994), together with new developments on psychological and
embedded empowerment (the latter suggesting that HRM systems that
include empowering practices are associated with superior organizational
performance relative to more traditional personnel systems), have helped
keep the issue on the policy and research agenda.
E
MPOWERMENT AND
P
ERFORMANCE
5
In addition to the above, two further factors are important in explaining
why the topic of empowerment periodically resurfaces with renewed vigor.
The first of these is the development of new technologies, and computer-
based ones in particular, that raise questions about how empowered users
should be. Although such technology was initially seen by some (e.g.,
Braverman, 1974) as posing a threat to empowerment at the job level,
others saw a need to empower users in order to realize its full potential and
achieve flexible production (e.g., Piore & Sabel, 1983; Susman & Chase,
1986). The second factor is that, by the 1990s, downturns in the economic
climate made downsizing and delayering increasingly common. As organiza-
tions shed staff it became necessary to empower those they retained
(Wilkinson, 1998).
Thus the current interest in empowerment can be seen to be the product of
both enduring democratic beliefs and values interacting with shifts in socio-
political thinking and economic conditions.
PSYCHOLOGICAL EMPOWERMENT
The most recent and distinct addition to the literature is that concerned with
psychological empowerment. Current interest in this idea is usually traced
back to the theoretical contribution of Conger and Kanungo (1988). They
noted that, whereas there was an extensive literature in both the management
and I/O fields on role empowerment and its effects on behaviour at work
(which we review in the next sections), the processes or mechanisms that
linked these remained largely neglected. Their approach was to focus on
the psychological experience of empowerment, how this might derive from
what we have defined as role empowerment (and other factors), and its
behavioural outcomes. They proposed that the main effect of empowerment
was to promote self-efficacy, that is, feelings of confidence in one’s ability to
perform tasks to a high standard, and that this in turn would affect ‘both
initiation and persistence of subordinates’ task behaviour’ (p. 476).
Following Conger and Kanungo’s lead, Thomas and Velthouse (1990), in
their article on the ‘cognitive elements of empowerment’, extended the em-
ployee experience approach. They proposed that the experience of empower-
ment involved four ‘task assessments’. The first, ‘impact’, they defined as the
extent to which individuals see their behaviours as producing the desired
effects in their work role. The second, ‘competence’, refers to individuals
feeling able to carry out their work tasks effectively (Conger and Kanungo’s
notion of self-efficacy). The third, ‘meaningfulness’, concerns ‘the value of
the task goal or purpose’ (p. 672), that is the extent to which individuals feel
that their work is personally significant. The final task assessment, ‘choice’,
refers to ‘causal responsibility for a person’s actions’ (p. 673), or perceived
freedom to determine how to carry out work tasks. The basic premise is that
6
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
the components combine additively to represent feelings or perceptions
of empowerment, and hence to promote behaviours that enhance work
performance.
Expanding on their analysis of perceived empowerment, Thomas and
Velthouse theorized about the organizational antecedents, proposing that
alternative practices would affect the components differentially. For
example, they suggested that delegation would act solely to enhance choice,
job enrichment (which also includes a greater variety of tasks) would promote
choice, meaningfulness, and impact, whereas appropriate pay systems would
mainly contribute to perceptions of competence and choice.
Psychological Empowerment and its Measurement
Against this theoretical background, researchers began to develop measures
of experienced empowerment, so that the various predictions about its
antecedents and effects could be empirically tested. Spreitzer (1995a) took
up this challenge and introduced the term psychological empowerment to
denote the experiential component that Conger and Kanungo and Thomas
and Velthouse had identified. Spreitzer developed a measure of the four
components that Thomas and Velthouse had advocated, namely, meaning,
competence, self-determination (choice), and impact. Items for the dimen-
sions were adapted from existing scales of work characteristics, of which the
following are examples: ‘The work I do is very important to me’ (meaning);
‘I have mastered the skills necessary for my job’ (competence); ‘I can decide
on my own how to go about doing my work’ (self-determination); and ‘I have
significant influence over what happens in my department’ (impact).
More recently, Kirkman and Rosen (1999) have developed a team-level
measure of psychological empowerment. Their measure also corresponds to
the Thomas and Velthouse model: the potency sub-scale is synonymous with
competence, and measures ‘the collective belief of a team that it can be
effective’ (p. 59); the meaningfulness sub-scale concerns ‘a team’s experienc-
ing its tasks as important, valuable, and worthwhile’ (p. 59); the autonomy
dimension, synonymous with choice, refers the extent to which ‘team
members experience substantial freedom, independence, and discretion in
their work’ (p. 59); and the impact sub-scale concerns ‘work that is significant
and important for an organization’ (p. 59). Factor analysis findings
were consistent with there being four sub-scales, but these were highly
intercorrelated.
Psychological Empowerment and Performance
Research to date has been concerned largely with the measurement of
psychological empowerment. We do not review that in detail, as it falls
outside the focus of this chapter on empowerment and performance.
E
MPOWERMENT AND
P
ERFORMANCE
7
However, part of the measurement task has been to examine construct
validity, that is, whether measures of psychological empowerment relate as
theoretically expected to antecedents and outcomes. Theory suggests that
psychological empowerment, though in part a consequence of empowering
work practices (i.e., enhanced employee decision-making responsibility), is
also affected by other factors; and that it is psychological empowerment that
results in behavioural outcomes (e.g., motivation and performance). Thus it
is assumed that empowering practices alone may not be sufficient to affect
behaviour, that employees also need to feel empowered before they engage in
performance enhancing work activities (Conger & Kanungo, 1988; Thomas
& Velthouse, 1990). In other words there are four elements in their overall
prediction: that role empowerment (and other factors) will promote psycho-
logical empowerment; that psychological empowerment will enhance
performance; that psychological empowerment will mediate the link
between role empowerment and performance; and the possibility that role
empowerment will interact with psychological empowerment to affect
performance.
Spreitzer (1995a) considered the relationship of psychological empower-
ment with antecedent and outcome variables within her original cross-
sectional measurement study. Using a sample of 393 managers, she found
that all four sub-scales were positively related to the antecedents of access to
information (a situational factor), and three of the four (except meaning) were
associated with self-esteem (a personality factor). The relationship of the
scales to outcomes was less consistent, with only competence and impact
being statistically significantly related in zero-order analyses with perform-
ance (e.g., performance standards, overall success) and innovative behaviour,
both as rated by subordinates. Subsequently, structural equation modelling
showed a good fit for the effects of the antecedent variables collectively on
psychological empowerment as a whole, but a less good fit for the effect of
psychological empowerment on effectiveness and innovation (albeit that the
paths were statistically significant at p<0:001 for both outcomes).
That initial study did not examine the possible mediational role of empow-
erment, an issue taken up by Spreitzer (1995b) in a second paper using the
same sample. Taking five potential antecedents, and the same two outcome
measures (as rated by the respondent’s subordinates and superiors), she
found some evidence of mediation for the relationship of ‘work unit
culture’ (i.e., an HRM orientation similar to that considered later in the
section on embedded empowerment) with innovative behaviour, but none
for the relationship of culture with effectiveness. There was no evidence of
mediation of the relationship of role ambiguity, socio-political support,
access to information, or access to resources, with either performance
measure. Thus, for this sample, evidence of mediation is at best weak.
However, as we note in our more general assessment of this area of research,
the antecedents are at best indirect measures of role empowerment.
8
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
Spreitzer (1996), together with colleagues (Spreitzer, Kizilos, & Nason,
1997), continuing to use the original sample of managers, went on to
reconsider the same potential antecedents of psychological empowerment
as in her 1995(b) paper (i.e., role ambiguity, socio-political support,
access to resources, work unit culture). However, this time the aim was to
determine more rigorously whether the four variables differentially predict
outcomes. The study considered each sub-scale while controlling for
the other three. This showed that, while collectively the sub-scales
predicted outcomes relating to work effectiveness, work satisfaction, and
job strain, no one dimension did so uniquely. Spreitzer et al. (1997) thus
concluded that ‘employees need to experience each of the empowerment
dimensions in order to achieve all of the hoped for outcomes of empower-
ment’ (p. 679).
Sprietzer’s series of studies has served to clarify and operationalize the
construct of psychological empowerment, and to establish that it is associated
with several of the assumed antecedents and outcomes. For our present
purposes, however, an important limitation is that this work is based on a
single sample of managers, leaving its generalizability unknown. Subsequent
studies by others help to address this limitation.
Gagne
´, Senecal, and Koestner (1997) report findings based on a sample of
157 technical and telemarketing employees. Factor analysis confirmed the
expected four dimensions of psychological empowerment. Using measures
from the Job Diagnostic Survey (JDS) (Hackman & Oldham, 1975), they
investigated, through path analysis, how perceived job characteristics (task
significance, feedback from the job, feedback from agents, and autonomy
support) related to psychological empowerment, and if psychological
empowerment mediated the relationship of those characteristics with
intrinsic motivation. Findings showed differential effects. For instance,
task significance predicted only meaning, feedback from the job predicted
impact and autonomy (self-determination), and autonomy support also pre-
dicted impact and autonomy. The findings further showed that, for two of
the dimensions, meaning and autonomy, those experiencing greater psycho-
logical empowerment also reported stronger intrinsic motivation. However,
the third dimension, impact, was unrelated to intrinsic motivation; whereas
the fourth, competence, was negatively associated. There was also evidence
that certain dimensions of psychological empowerment mediated the link
between the job characteristics and the outcome (e.g., the relationship
between autonomy support and intrinsic motivation was through the psycho-
logical empowerment dimension of autonomy). This study is based solely on
cross-sectional and self-report data and as such is methodologically limited.
Nonetheless, it extends investigations to another type of sample and, contrary
to Spreitzer et al.’s (1997) conclusion, suggests there may be dangers in
treating the different dimensions of psychological empowerment as a single
construct.
E
MPOWERMENT AND
P
ERFORMANCE
9
More recently, Siegall and Gardner (2000) have examined the relationship
of communication with a supervisor, attitude towards the company, team-
work and concern for performance, with the dimensions of empowerment.
Applying regression analysis to data from a sample of 203 lower level manu-
facturing employees, they found communication with a supervisor to be
associated with experienced meaning, self-determination and impact, and
that attitude to the company contributed solely to meaning. Teamwork was
unrelated to any dimension of psychological empowerment when the other
variables were controlled. Turning to the question of effectiveness, this study
also showed that those experiencing more meaning and self-determination
recorded greater concern for performance. Though, as for the previous work,
this study is methodologically limited, because of its cross-sectional design
and reliance solely on self-report data, it again suggests the components of
psychological empowerment are differentially associated not only with
assumed antecedents but also with a performance-related outcome.
Liden, Wayne, and Sparrowe (2000) report a study on a sample of 337
lower-level service company employees. They focused in particular on the
extent to which the four dimensions of psychological empowerment mediate
the relationship between job characteristics (an aggregate of task identity,
task significance, and feedback from work) and outcomes (work satisfaction,
organizational commitment, and job performance). Using regression
analyses, they found that meaning completely accounted for the relation-
ship between job characteristics and commitment; and that meaning and
competence partially accounted for the relationship between job character-
istics and satisfaction.
The findings for performance (rated by supervisors) were rather different.
Although zero-order correlations suggested that all four dimensions of
psychological empowerment were positively associated with the outcome,
regression analysis showed only one component, competence, was related
to performance when the effects of the other three were controlled. More-
over, there was no mediation, because the job characteristics were unrelated
to performance in the first place. A weakness of this study, however, is that
the measure of job characteristics excluded the most direct measure of role
empowerment, namely autonomy, and hence the most likely antecedent of
psychological empowerment. We shall consider this further in the next
section.
The last study we highlight is that by Kirkman and Rosen (1999). They
also examined, cross-sectionally, whether psychological empowerment was a
mediator of the relationship between antecedents (team leader behaviours,
production/service responsibilities, team-based human resource policies, and
social structure) and outcomes (e.g., productivity and customer service).
However, their investigation was based on a sample of some 100 teams,
from three manufacturing companies and one insurance company. They
administered the team-level measure of experienced empowerment described
10
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
earlier (p. 7) which, because of the high correlations between the four sub-
scales, they used to provide a single empowerment score.
There were three key findings. First, all four antecedents (holding the
others constant) were positively related to team psychological empowerment.
Second, teams reporting greater empowerment had higher productivity and
provided better customer service (in both cases as assessed by external team
leaders). Third, the observed relationship between the antecedent variables
and performance (and overall index of productivity and customer service
together with a measure of proactivity) was accounted for by psychological
empowerment, with the sole exception of team leader behaviours (which
retained a direct effect on performance over and above that mediated by
team empowerment).
Taking Stock
It is evident from the studies reviewed, together with many others in the
literature (e.g., Arnold et al., 2000; Laschinger, Finegan, Shamian, &
Almost, 2001), that the construct of psychological empowerment has
attracted a great deal of attention. Nonetheless, research on this topic is
still in its infancy. Thus, although one may reach preliminary conclusions,
the main lessons concern issues for future inquiry.
Perhaps the strongest conclusion is that the theoretically expected four-
dimensional nature of psychological empowerment has been supported
across diverse samples. However, this observation requires qualification. A
study by Fulford and Enz (1995) found that while meaningfulness and self-
efficacy were distinct dimensions, impact and self-determination came
together as a third. Siegall and Gardner’s (2000) exploratory factor analysis
found support for the dimensions of meaning, competence, and impact, but
self-determination did not emerge unless they lowered the statistical criteria
below normal levels. Also, the problem of discriminant validity was an
issue for Kirkman and Rosen’s (1999) team-level measure, in that the four
dimensions they found were so highly related that they aggregated them into
a single index for analytic purposes. This has been a problem from the outset
as is evident from Spreitzer’s (1995a) comment in the original measurement
study, that ‘The limited discriminant validity found ... suggest[s] that
continued refinement of the measures is necessary’ (p. 1461).
The identification of stable and distinct dimensions of psychological em-
powerment is also likely to be important for conceptual and theoretical
reasons. A possibility that has been largely neglected is that the components
are sequentially related. For instance, it seems likely that self-determination
(i.e., choice or experienced autonomy) is a prerequisite for one or more of the
other components. This perspective is supported by Kraimer, Sibert, and
Liden’s (1999) analysis suggesting that ‘self-determination must be present
for impact to occur’ (p. 140). Drawing on Liden and Arad’s (1996) model of
E
MPOWERMENT AND
P
ERFORMANCE
11
empowerment, Kraimer et al. commented: ‘Self-determination indicates
power potential, and impact reflects actual power. Thus, potential power is
a necessary condition for actual power in the workplace’ (p. 140). They,
accordingly, recommended that Spreizter’s model should include a direct
pathway between self-determination and impact. Equally, it is plausible
that self-determination is a precursor of meaning, or that competence leads
to impact. The emphasis thus far on dimensions of psychological empower-
ment has discouraged investigation of possible relationships among these
dimensions. This should be a priority for future research.
Another important issue concerns the relationship between role and
psychological empowerment. Investigators have tended not to include in
their studies the one aspect of role empowerment, namely the degree of
autonomy or responsibility afforded to job incumbents, that would be
expected to predict directly self-determination or choice (i.e., experienced
autonomy) (Gagne
´et al., 1997 are an exception). The most likely reason
for this is that measurement of the two concepts is confounded. This arises
because, to measure psychological empowerment, Spreitzer (1995a) adapted
the autonomy items from Hackman and Oldham’s (1975) Job Diagnostic
Survey (JDS), which was designed to measure role empowerment. For
example, one of the three items in the self-determination sub-scale of psycho-
logical empowerment is ‘I have considerable opportunity for independence
and freedom in how I do my job’ (Spreitzer, 1995a, p. 1465), and one of three
items in the autonomy scale of the JDS is, ‘The job gives me considerable
opportunity for independence and freedom in how I do the work’ (Cook,
Hepworth, Wall, & Warr, 1981, p. 184). The basic problem is that, though
psychological and situational empowerment are conceptually distinct at the
operational level, where reliance is placed on self-report measures the
distinction is almost impossible to uphold (Liden et al., 2000). Given that
psychological empowerment is quintessentially an experiential construct,
leaving no alternative but to use self-report measures, the implication is
that future work should deploy objective, or at least independent, corre-
sponding measures of role empowerment.
Similarly, there is a need, wherever possible, for objective or independent
measures of outcomes. Asking employees the extent to which they feel their
work has impact, for example, would seem to be necessarily related to self-
reports of performance, making findings somewhat tautologous. As we have
seen, research so far has fared better in this respect, but nonetheless self-
report outcome measures are not uncommon.
Another requirement is for future research to move beyond the
cross-sectional research designs that so far have exclusively been used.
Cross-sectional research may be acceptable in the development of a new
research area, where it is a cost-effective strategy for developing measures
and obtaining circumstantial evidence for substantive predictions. The point
has been reached, however, where it is essential to move to longitudinal and
12
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
intervention studies, in which role empowerment is substantially changed
and its subsequent effects on psychological empowerment and performance
assessed.
Finally, future research should explore all aspects of the agenda originally
set out. This not only involves investigating the antecedents (both situational
and individual) and outcomes of psychological empowerment, and hence the
mediating role of that variable, but also the possibility that situational and
psychological empowerment interact to affect outcomes. Clearly, if role or
organizational empowerment practices are the sole determinants of psycho-
logical empowerment, then a mediational approach is sufficient. However, it
appears that psychological empowerment is also determined by personality
and other individual difference factors, such as locus of control and self-
esteem (Spreitzer, 1995a). That being the case, psychological empowerment
can vary independently of situational empowerment, making the possibility
of interaction between the two more likely.
ROLE EMPOWERMENT
As discussed in our brief history of empowerment research, role empower-
ment was the original emphasis of research and practice and remains of
central concern today. This is evident, for example, in Robbins et al.’s
(2002) outline of an integrative model of empowerment, that encompasses
all four aspects of empowerment considered in this chapter. They propose
‘that the most critical step in the empowerment process is the creation of a
local work environment within a broader organizational context that will
provide both an opportunity to exercise one’s full range of authority and
power (i.e., empowered behaviors), as well as the intrinsic motivation
within employees to engage in that type of behavior (i.e., psychological
empowerment)’ (p. 420). This carries forward the job enrichment ethos as
exemplified by Herzberg’s (1966) two-factor theory, Hackman and Oldham’s
(1976) Job Characteristics Model ( JCM), and the socio-technical systems
approach focusing on autonomous work groups.
The JCM represents this traditional perspective on empowerment. The
model identifies five core job characteristics, namely skill variety, task
identity, task significance, autonomy, and feedback from the job itself.
These are specified as determinants of three critical psychological states.
The first three job characteristics are posited to contribute collectively to
experienced meaningfulness; autonomy to experienced responsibility; and
feedback to knowledge of results. In turn, the critical psychological states
are cast collectively as promoting work satisfaction, internal work motivation,
task performance, and reduced absence and labour turnover. Of the five job
characteristics, autonomy is recognized within the JCM as having more
E
MPOWERMENT AND
P
ERFORMANCE
13
bearing on the critical psychological states, and hence performance as an
outcome, than task variety, task identity, or task significance.
There already exist comprehensive reviews and critiques of the empirical
literature on job enrichment and autonomous work groups engendered by the
JCM, socio-technical systems thinking, and cognate approaches (e.g., Parker
& Wall, 1998; Parker, Wall, & Cordery, 2001). We thus focus on more recent
developments encouraged by two important limitations highlighted by those
reviews. One is that the mechanisms linking empowerment to performance
have remained largely unexplored, and seem likely to extend beyond the
motivational ones usually assumed. The other is the need to better under-
stand the circumstances (i.e., contingencies) under which this type of
empowerment does and does not affect performance.
Mechanisms Linking Role Empowerment and Performance
The traditional assumption is that job enrichment promotes performance
through motivation in the form of effort (e.g., Campion & McClelland,
1993). Yet rarely has this assumption been directly tested, for instance by
empirical investigation of whether change in such role empowerment is
associated with change in employee motivation, and that the latter accounts
for any change in performance. Indeed, in the highly influential JCM, in-
trinsic motivation is cast as an outcome alongside job performance, rather
than a mechanism through which performance is achieved. Thus motivation
as a mechanism should remain on the agenda.
For our present purposes, however, we look beyond that traditional
motivational mechanism, and concentrate on likely additional ones. In this
respect a number of promising suggestions have recently surfaced. One,
offered by Parker, Wall, and Jackson (1997), concerns ‘flexible employee
work orientations’. Their argument is that training and communication can
be sufficient for surface acceptance of new ‘strategic orientations’, such as the
minimization of inventory (e.g., just-in-time) or use of preventive problem-
solving (e.g., total production maintenance); but more fundamental interna-
lization requires role empowerment. As the authors state: ‘It is one thing for
employees to endorse a set of general organization-wide principles, and quite
another for them to carry those through to the extent that they change their
views of their own work responsibilities [that is] develop new and comple-
mentary role orientations’ (p. 900). Parker et al. (1997) go on to predict that
‘the required role orientations will only develop if employees are given more
autonomy over their work’ (p. 901), and test this prediction across three
studies. In the first study they developed and examined the validity of new
measures of strategic and role orientation. The second and third studies
investigated changes in orientation following the introduction of the new
working practices of just-in-time and total quality management, with and
without role empowerment. The findings showed that whereas strategic
14
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
orientation changed as a function of the introduction of the new work
practices, irrespective of role empowerment, change in role orientations
was only realized where there was also role empowerment. The assumed
link to performance, however, was not directly addressed.
One of the implications of role empowerment is that employees take on a
broader set of duties, and it is this that leads to performance benefits. Typic-
ally, where job enrichment or autonomous group working is implemented,
added to the execution of the core technical activities (e.g., assembling a
washing machine or recording client financial transactions) is responsibility
for a range of supporting tasks. These may include designing new work
procedures or methods, liaising with suppliers or customers, allocating
tasks among coworkers, and representing coworkers in meetings with
senior management. In other words, there is an increase in role breadth,
defined as ‘activities that are more proactive, interpersonal and integrative
in their nature’ (Parker, 1998, p. 836). Parker (1998) proposes that role
empowerment will promote greater ‘role breadth self-efficacy’ (RBSE),
that is the ‘perception that [employees] are able to carry out these types of
task’ (p. 836), and that this will enhance performance.
Empirical investigation of RBSE involved the development of a measure
and examination of its association with role empowerment in two large
samples of manufacturing employees (Parker, 1998). The measure was
shown to be distinct from related concepts such as proactive personality
and self-esteem. Also as predicted, cross-sectional analyses in both studies
showed role empowerment (e.g., job enrichment—task control and decision-
making influence) to be a key predictor of RBSE. A longitudinal analysis
further supported this finding, showing that increased job enrichment was
associated with increased RBSE. Thus role breadth self-efficacy is a clear
candidate as a mechanism linking role empowerment to performance, but its
direct link with performance remains to be directly tested.
Perhaps one of the most intriguing and challenging recent developments
on mechanisms linking role empowerment to performance is that concerned
with learning. More specifically, the proposition is that role empowerment
promotes knowledge and understanding in employees that enable them to
carry out their work more effectively. This idea has been mooted for some
time. Herzberg (1966), for example, suggested that ‘job design promotes
psychological growth which involves knowing more, seeing more relation-
ships in what we know, being creative, being effective in ambiguous situa-
tions’ (p. 70). Similarly, Susman and Chase (1986) argued that ‘aside from
the motivational benefits they may derive from enriched jobs ... employees
are in a better position to see the relationships between specific actions and
their consequences’ (p. 268); and Wagner, Leana, Locke, and Schweiger
(1997) that the benefits of role empowerment ‘might lie not in its power to
motivate employees, but rather in its ability to facilitate cognitive growth and
awareness’ (p. 50). Action Theory (Hacker, 1985; Frese & Zapf, 1994) also
E
MPOWERMENT AND
P
ERFORMANCE
15
specifies that control at work is a prerequisite for learning; and Karasek and
Theorell’s (1990) Demand Control Model identifies high decision latitude
(i.e., autonomy), together with demands, as necessary for ‘active learning’.
Despite this theoretical heritage, empirical investigation of the link
between role empowerment and knowledge development in work settings
has been scant. In a longitudinal change study, Wall, Jackson, and Davids
(1992) examined the effect of increased operator control on the performance
of a robotics system. The performance of the system was determined by the
effectiveness of fault management. They reasoned that effects showing an
immediate reduction in the time taken to correct operational faults would
reflect the application of existing knowledge, whereas a progressive reduction
in the number of faults would indicate the development of new knowledge.
They found evidence of both effects. In an earlier study of computer-
controlled assembly operators, Jackson and Wall (1991) showed equivalent
learning-related effects.
In neither of those studies, however, was the operators’ knowledge directly
measured. This omission was addressed by Leach, Wall, and Jackson (2003),
who developed knowledge elicitation techniques for use in work settings to
examine change in knowledge following an empowerment initiative for
operators of complex manufacturing technology. They found the predicted
increase in knowledge, particularly among less experienced employees.
Improvements were also recorded in employee self-confidence and strain,
but not in job motivation or job satisfaction. This study clearly focuses on
conscious knowledge, and so does not begin to address the possibility that
role empowerment might also enhance tacit or implicit knowledge of the kind
identified in the cognitive psychology literature (e.g., Berry & Broadbent,
1984). Field investigations of this possibility should be a priority. More
generally, the potential of combining role empowerment approaches in I/O
psychology with models and methods in cognitive psychology provides a
promising, and methodologically challenging, line for future development
(Hodgkinson, 2003).
A number of other possible mechanisms linking role empowerment to
performance have been suggested (Parker et al., 2001). One, implicit in the
socio-technical systems principle of control of variance at source, is that of
quick response. Time is saved simply because empowered employees can
carry out tasks that otherwise they would have to wait for others to complete.
Other suggested mechanisms include the possibility that empowerment op-
erates through labour intensification or improved goal-setting (Kelly, 1992),
by reducing indirect costs (e.g., fewer supervisors or technical support staff,
Wall, Kemp, Clegg, & Jackson, 1986), by enhancing perspective-taking
(Parker & Axtell, 2002) and, in the case of group work, by enhancing team
processes (Wagner et al., 1997).
Although many promising ideas concerning the mechanisms linking role
empowerment to performance have been put forward, this area of inquiry is
16
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
very much in its infancy. There is as yet no substantial body of evidence
supporting any one mechanism. Moreover, investigators have only taken the
first step, of showing that particular variables such as RBSE and knowledge
are associated with role empowerment, treating them in effect as outcomes.
They have not directly tested whether these variables are mechanisms in the
full meaning of that term, that is, variables that can account for observed
relationships between empowerment and performance. Equally, there have
been no studies looking at the separate and combined effects of different
possible mechanisms, and this is important because it seems likely that
more than one is involved. Increased knowledge, for example, is likely to
promote both role breadth self-efficacy and motivation. The question of
mechanisms is important, because if we can establish how and why role
empowerment affects performance then it will be easier to understand the
circumstances under which it will be effective. This leads us to our second
issue.
Contingencies and the Link between Role Empowerment
and Performance
Kelly (1992) reviewed 31 of the methodologically most rigorous job redesign
studies, and found job performance change ranging from 17 to þ50%, with
evidence of performance gains of 10% or more in 13 cases. A recent evalu-
ation of team-based interventions shows equally variable performance results
(e.g., Cohen & Bailey, 1997). The same applies in Waterson et al.’s (1999)
survey of UK manufacturing companies, where, of the 406 (out of 564)
with empowerment strategies, 22% reported no performance effect, 32%
moderate gains, and only 46% more substantial benefits. Clearly there is a
case for addressing the question of the circumstances under which such role
empowerment does and does not promote performance.
There have been many suggestions concerning contingencies likely to
affect the impact of role empowerment on performance. For team-based
empowerment (e.g., autonomous work groups), Wageman (1997) identified
goal clarity, demographic and skill diversity, size, stable membership, and
leadership style as factors likely to enhance or inhibit performance outcomes.
Other proposed contingency factors include shared attitudes and inter-
personal trust (Dean, Brandes, & Dharwadkar, 1998), collective efficacy
beliefs (Little & Madigan, 1997), cohesiveness (Banker, Field, Schroeder,
& Sinha, 1996), personality and ability mix (Stevens & Campion, 1999),
and transformational leadership (Arnold et al., 2000). All these are plausible
suggestions, but as yet they lack the degree of empirical support and
theoretical development to make them compelling.
One development, however, shows particular promise, and this focuses on
operational uncertainty. This concept denotes the extent to which it is
unclear how best to do the work, which tends to increase as a function of
E
MPOWERMENT AND
P
ERFORMANCE
17
frequency of change in product or service requirements, variability in
materials, and unreliability of technology. In an integrating analysis, Wall,
Cordery, and Clegg (2002) propose that:
the effectiveness of empowerment practices ... will be contingent on the
degree of operational uncertainty that prevails (and) that this proposition
generalizes across the various levels of analysis and areas of application of
empowerment, from its use as an overall principle of organizational design,
through its manifestation in work design (e.g., as in job enrichment or self-
managing teams), to its application as part of other initiatives (e.g., as part
of total quality management) (pp. 148–149).
Clearly that proposition encompasses all three kinds of situational empower-
ment we cover in this chapter, namely role, organizational, and embedded.
Here, however, we focus on the case of role empowerment, where two con-
siderations help support the claim. The first of these is the existence of
empirical evidence consistent with the proposition. Wall, Corbett, Martin,
Clegg, and Jackson (1990) showed that increasing operator control for em-
ployees working on computer-based assembly systems resulted in substantial
performance gains for systems characterized by high operational uncertainty,
but no discernible effects when they worked on systems with low operational
uncertainty. Cordery, Wright, and Wall (1997) reported equivalent findings
for self-managing work groups in water treatment plants.
The second supporting factor is the logical consistency between the con-
tingency and the learning mechanism proposed above. Wall et al. (2002),
argue that, at a psychological level, operational uncertainty means a lack of
knowledge about production requirements, and hence a lack of understand-
ing about cause and effect. As a result, where there is operational uncertainty:
there is both the opportunity to empower employees, in terms of giving
them important areas of decision-making, and scope for learning. Con-
versely, where there is little uncertainty, the knowledge requirements of
the work are low, and there is consequently little scope for knowledge
development and less opportunity to offer employees real empowerment.
It follows that the effects of empowerment on performance will increase as
the degree of production uncertainty increases (Wall et al., 2002, p. 159).
The case for operational uncertainty as a contingency may be an attractive
one, and more persuasive than some others because of the empirical and
theoretical support that can be marshalled in its favour. Nonetheless, that
support is still limited and indicates the potential rather than product of
this line of inquiry. The more general message is that, as for the study of
mechanisms, investigation of contingencies is calling out for empirical and
theoretical development. If contingencies exist, and remain unrecognized,
18
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
many organizations persuaded to follow the empowerment path will achieve
disappointing results; others who would benefit from following this path will
be dissuaded from doing so; and research on the effectiveness of empower-
ment initiatives will yield inconsistent results.
ORGANIZATIONAL EMPOWERMENT
We use the term organizational empowerment to denote practices that enable
employees to have a say in decisions about the management and strategy of
their organization. This distinguishes it from role empowerment, which is
about autonomy in the execution of the individual’s or team’s primary task.
Organizational empowerment is typically concerned with decisions about
terms and conditions of employment, working practices, quality manage-
ment, environmental strategy, investment in new technology, mergers and
acquisitions, or even whether or not to adopt a strategy of enhancing role
empowerment. The two types of empowerment may be related, as many of
these strategic decisions, and especially those concerned with terms and con-
ditions and working practices, can enable or constrain role empowerment.
In addition, much organizational empowerment is through representatives
and thus for most employees is indirect. Examples of such organizational
empowerment include representation through trade unions, works councils,
consultative committees and supervisory boards, and involvement in quality
circles. However, organizational empowerment through the use of more
direct methods (e.g., two-way team briefing) is an increasingly important
part of organizational life (see Forth & Millward, 2002). Here we focus on
trade unions and works councils, as this has dominated research. Given the
organization-wide emphasis of this form of empowerment, the appropriate
level of analysis for performance is the organization.
The Nature of Trade Unions
Trade unions provide a distinct form of organizational empowerment as they
are associations of workers that are independent of management and have an
existence beyond the boundaries of the organization. In most countries trade
union rights are protected by the State, though this may take a variety of
forms. Trade union rights may be part of the constitution, as is the case in
Germany, Italy, Sweden, Brazil, and South Africa. In contrast, in North
America and the UK, where no such constitutional right exists, there are
laws defining the processes of the certification of trade unions so their
independence from management is protected.
Regardless of the nature of the legal rights underpinning trade unions, they
have three main functions, to: (1) negotiate on behalf of their members for
better terms and conditions of employment; (2) offer employees a voice with
which to articulate their interests and grievances to management; and (3) help
E
MPOWERMENT AND
P
ERFORMANCE
19
legitimize, monitor, and enforce agreements and performance requirements.
The existence of trade unions beyond the workplace, through their own
national organizations and their joint coalitions (such as the TUC in the
UK and the American Federation of Labor-Congress of Industrial Organ-
izations in the USA), means that they are also involved in national political
processes. This involvement is typically either through lobbying or more
formal membership of tripartite bodies of trade unions, employers’ federa-
tions and government (e.g., the corporatist industrial relations bodies that
exist in Germany and the Netherlands or in the Low Pay Commission in the
UK).
Trade Unions and Performance: The Arguments
In contrast to the other forms of empowerment considered in this chapter,
that are expected to enhance performance, trade unions can be associated
with both positive and negative effects. Trade unions have a monopoly
face and a voice face (Freeman & Medoff, 1984). Acting as monopolies
they are predicted to have negative effects on performance in two ways.
First, by using their power to bargain for better wages and fringe benefits,
unions secure for their members a greater proportion of the company’s
surplus revenue and hence reduce profits. Second, unions can negotiate the
rules regulating jobs, such as those involving internal job mobility, redun-
dancy, the allocation of overtime, demarcations between occupations, and
working conditions. It is generally assumed that such ‘restrictive practices’
constrain the optimal allocation of labour (Machin & Wadhwani, 1991;
Metcalf, 1989).
In contrast, through their voice face, unions are predicted to have positive
effects on performance. The argument, drawing on Hirschman’s (1971)
distinction between ‘exit’ and ‘voice’, is that, by providing a conduit for
employees to have their say, unions help to retain skilled labour and to
motivate employees. Voice refers to ‘the use of direct communication to
bring actual and desired conditions closer together’, which in employment
situations entails ‘discussing with an employer conditions that ought to be
changed’, as opposed to exit which means ‘quitting the job’ (Freeman &
Medoff, 1984, p. 8). Voice, which Freeman and Medoff identify with trade
unionism, is expected to promote performance by allowing workers safely to
express their grievances. This can help remove the causes of those grievances,
thus increasing employee motivation and satisfaction and reducing labour
turnover (i.e., exit). Moreover, employee voice may be used to suggest im-
provements in working practices, training methods, and safety procedures.
This cooperative dimension to employment relations is part of what is
increasingly being labelled a ‘partnership’ approach, in contrast to the
antagonistic one more traditionally assumed. Indeed Freeman and Medoff
20
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
(1984) regard ‘generally cooperative labor-management relations ... as a
determinant, in its own right, of high productivity’ (p. 224).
An additional way in which trade unions may contribute positively to
organizational performance is in their role as agents of effective management.
More specifically, union representatives, as a result of their involvement in
collective bargaining, both legitimize and help police agreements. For
example, unions often are involved in day-to-day management processes,
such as the nomination of employees for training, overtime, and redundancy,
or in disciplinary processes. In so far as they fulfill this monitoring function,
unions and their representatives will help reduce both management costs and
disruption from non-conformity.
Taken together, the effects of the two faces of unionism on organizational
performance may be negligible, to the extent that wage effects and restrictive
practices of unions are offset by the positive effects of voice. It might
however be the case that unions have net positive effects on productivity
(i.e., output per employee) but negative effects on profits, as the wage
effects are not sufficiently offset by the productivity gains. However, this
assumes the relationships apply to organizations in general, but the effects
may be contingent. Here there are four considerations. First, product market
competition may affect the impact of unionism on performance. Unions are
likely to have more success in raising wages where there is less product
market competition. If unions operated in perfectly competitive markets,
and all they did were to raise wages and fringe benefits, in the long run
both they and the firms in which they were recognized would not survive
in competition with non-unionized firms. Similarly product market com-
petition is likely to limit the scope for restrictive practices. Second, and in
contrast, where labour is scarce the power of the union increases, so workers
are more able to maintain their own working practices. Third, the degree of
cooperation between management and unions (and employees) may act more
as a moderator of the relationship between unions and performance than a
determinant in its own right, as indeed Freeman and Medoff (1984) also
suggest when they say ‘unionism per se is neither a plus nor a minus to
productivity. What matters is how unions and management interact at the
workplace’ (p. 179). Finally, the various relationships may vary with the
institutional context. For example, where institutional arrangements permit
industry-wide bargaining (as has been commonly the case in much of
Europe) wages may be equivalent across all unionized firms in an industrial
sector, so that the relative performance of the companies depends on other
factors. This can also arise without industry-wide bargaining. For example,
in the absence of foreign competition, firms in oligopolistic industries, such
as the automobile industry in the USA, are able to achieve a similar effect by
a process of coordinated bargaining. More specifically, as Kochan et al.
(1986) have recorded, a bargain struck with one firm would set the pattern
for the negotiations with the others.
E
MPOWERMENT AND
P
ERFORMANCE
21
Trade Unions and Performance: The Evidence
Empirical investigation has a major role to play in helping to resolve the net
effect of trade unions on organizational performance. Early studies of the
relationship between unionism and performance concentrated on the wage-
rate issue. For instance Lewis (1986) found that the union mark-up for the
US was around 15%, varying between 12 and 19% between 1967 and 1979.
Subsequent work produced similar figures for the 1980s, but more recent
analysis suggests that although a mark-up effect persists it has declined
in industries where the product market had become more competitive
(Bratsberg & Ragen, 2002). In Britain the union mark-up prior to the
1980s was slightly lower, being estimated at 10% (Blanchflower, 1999).
The extent to which it remained stable with the increasingly competitive
markets of the 1980s and 1990s is a matter of debate: some studies suggest
persistence (e.g., Blanchflower, 1999) but others a considerable reduction
(e.g., Booth & Bryan, 2001). However, a recent analysis comparing wage
differentials between union and non-union members suggests that the mem-
bership premium did fall from 12.2% between 1993–1995 to 5.1% between
1999–2001, and for some workers (e.g., highly educated ones) it almost
collapsed (Blanchflower & Bryson, 2003). This evidence supports the
argument that unionization enhances wage rates, but that it is moderated
by product market conditions and/or labour market conditions. Blanchflower
and Bryson (2003) also took a comparative perspective, and found that while
a substantial union premium is evident in many countries (such as Canada,
Australia, Denmark, and Japan), the institutional arrangements in several
European countries (e.g., Germany, France, Netherlands, and Sweden)
mean that union wage settlements spill over to non-union workers.
Freeman and Medoff (1984) were the first to extend the analysis of trade
union effects on wages to productivity and financial performance. They
found for the USA that unionization had a modest positive effect on pro-
ductivity, and that this was moderated by the product market competition
and a cooperative industrial relations climate. However, profits were reduced
by unionism, and this was more pronounced where product competition was
low.
There have been many studies following Freeman and Medoff ’s lead, and
reviews of this literature present a consistent picture (e.g., Belman, 1992).
Doucouliagos and Laroche (2000) conducted a meta-analysis of 79 published
papers on the union–productivity link. Virtually half of these are based on
data from the USA, with the remainder covering France, UK, Australia,
Germany, Korea, Japan, and Canada. Analysis revealed no consistent asso-
ciation between unions and productivity. However, there was evidence of
effects varying by country, industry sector, and time. For instance, there
was a negative relationship between unionization and productivity growth
for Australia, no relationship within the UK and the USA, and a positive one
22
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
for Germany. With regard to industry sector, a positive relationship between
unionization and productivity was found in the USA for manufacturing and
construction, but not in the rest of the economy. The time-sensitivity of the
results is illustrated by the fact that the union–productivity relationship was
negative in studies covering the 1950s but was subsequently generally
positive. Finally, across the sample as a whole, a hostile industrial relations
climate was associated with a negative relationship between unions and
productivity, consistent with the argument that cooperative labour relations
is a contingency.
Metcalf ’s (2003) review and interpretation of the evidence from the USA,
Canada, UK, Germany, Japan, and Australia provides a complementary
perspective to Doucouliagos and Laroche (2000), as it allows for more
qualitative judgement than did their meta-analysis. Metcalf, confirms both
the positive association between unionism and productivity and the negative
one with profit, and highlights change over time. For instance, in both the
UK and Australia productivity was negatively associated with unionization
prior to the 1990s, when the labour–management relationships might be
characterized as more antagonistic; but since the restrictions on union
power introduced around that time, and a generally more cooperative
climate of industrial relations, this is no longer the case. Where the product
market is monopolistic (measured by five or fewer competitors) Metcalf
suggests that unions still tend to lower productivity. Finally, he presents
evidence that cooperative labour relations also moderate the relationship.
Particularly significant is the finding, based on a national study of UK work-
places, that unionized workplaces with partnership arrangements perform
better in terms of both profitability and productivity than all other types
of workplace, unionized or otherwise.
Overview
The overall conclusion is that organizational empowerment based on trade
unionism tends to raise wages, raise productivity, but depress profits—the
precise nature of these relationships is moderated by a range of factors, the
most important of which appear to be product market competition and
cooperative labour relations.
The studies, however, have three main methodological weaknesses. First,
although there has been some attempt to track change over time, such anal-
ysis is based largely on comparing findings from separate cross-sectional
studies rather than systematic longitudinal data. This does not provide a
basis for causal inference. The second weakness is that while allowance in
some studies is made for the co-cooperativeness of relations between manage-
ment and the union, in general unions are treated homogeneously. It seems
likely such union–management relationships are a major factor, and the few
studies taking it into account support this view. The third limitation is that
E
MPOWERMENT AND
P
ERFORMANCE
23
evidence to date is based on comparing unionized with non-unionized work-
places or firms, regardless of the nature of employment relations practices in
non-unionized firms. In some cases, non-unionized organizations have
arrangements in place that equate to those offered by the union. For instance,
though unions may provide for employee voice and involvement in wage
setting, so too will other non-union provisions.
The main implication of these points is that research to date is at a very
general level of analysis, and that more allowance needs to be made for union
policy and alternative non-union provisions. The evidence is that multiple
channels affect employee relations. This is certainly the case in the UK
(Gospel & Willman, 2003) and probably much of Europe (Fenton-O’Creevy,
Wood, & Callerot, 1998), where any bargaining that may occur in workplaces
may still predominantly engage the union but much of the consultation and
information sharing will involve either joint consultative committees or
direct methods such as team briefings. Accordingly we need research that
reflects the decline in the monopoly of the union over representation. This
need is reflected in studies that attempt to look at unions in the context of
direct communication and other practices associated with HRM (e.g., Wood
& de Menezes, 1998).
The Nature of Works Councils
Works councils are, Frege (2002) observes, ‘widely seen as the most promi-
nent, widespread and powerful form of industrial democracy in contempor-
ary capitalist society’ (p. 221). They are legally constituted bodies, which,
like trade unions, are independent of management. They can be defined as
‘institutionalised bodies of collective worker participation at workplace level
with specific information, consultative and codetermination rights in person-
nel, social and economic affairs’ (Frege, 2002, p. 223). They are largely
confined to northern European countries, such as Germany, the Netherlands,
and Sweden, but they have been recently introduced into the transitional
economies of eastern Europe and South Korea. Here we confine our
discussion to Germany, as the literature on the performance effects of
works councils is largely limited to that country.
Workers have a legal right to establish works councils in Germany in all
organizations with five or more employees. Nonetheless, they are not ubiqui-
tous. Addison, Bellman, Schnabel, and Wagner (2002) estimated that works
councils existed in only 16.3% of all eligible private enterprises in Germany,
but that this covered 53% of the private sector workforce. The chance of
having a works council increases markedly with size of company. They also
show that only 29.9% of workplaces with between 21 and 50 employees have
a works council but above that figure of employees the majority of workplaces
tend to have them, rising to 91.7% of workplaces with over 500 employees.
24
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
However, both the proportion of firms with works councils and the coverage
rate of works councils has been declining since the 1980s (Hassel, 1999).
Works councils have several rights of varying strength (Jacobi, Keller, &
Mu
¨ller-Jentsch, 1998). The strongest is co-determination, which means the
works council has at least a provisional right of veto over managerial deci-
sions, which may extend to joint decision-making for certain issues. Works
councils are given co-determination rights over ‘social issues’, such as
principles of remuneration, regulation of overtime and short-time working,
holiday arrangements, performance monitoring methods, and personnel
matters that regulate the internal labour market (e.g., policies on recruitment
and grading). The second type of right is to consultation, which applies to
personnel planning, changes in work processes, the working environment,
new technology, and job content. This thus provides a legal right over
matters that affect role empowerment. Finally, the weakest right is the
right to information on financial affairs of the firm, and planned changes
that may significantly disadvantage employees.
Works councils have a status and function that is distinct from the trade
unions. All workers, and not just trade union members, can vote in works
council elections, both to establish the works council and choose representa-
tives. Representatives are not permitted to strike, and their role is ‘to repre-
sent workers’ interests while acknowledging the interests of the firm’ (Frege,
2002, p. 223). This conventionally is seen as orientating the works council
towards a cooperative partnership with management, as opposed to the
more antagonistic competitive approach traditionally associated with trade
unionism.
Viewed in relationship to the trade union, works councils are presented as
the second element of the dual system of representation that was introduced
in the early years of the Weimar Republic. Collective bargaining, which was
traditional at the sectoral or regional level, was conducted by unions and
concentrated on quantifiable matters such as wages and hours of work. In
contrast the works council represents workers at the workplace. This dual
system is widely seen as enabling the separation of conflicts of a distributional
nature (e.g., the determination of wages) to be settled independently of issues
of a more integrative nature (e.g., concerning efficiency and work practices).
Nonetheless, there is a ‘relationship of mutual dependence’ (Jacobi et al.,
1998, p. 212) between the unions and works councils. This has four aspects.
First, many works council members are also active trade unionists (estimated
to be around 75%, see Niedenhoff and Pege, 1989; though this is lower in the
newer industries). Indeed, in many cases, members are mandated by the
union. Thus they can bring union issues to works councils, and in turn
works council concerns can affect sectoral and regional bargaining. Second,
the union supplies the works council with information and expertise (e.g.,
through education provision). Third, members of works councils often act as
agents for the union at the workplace, their role in recruiting union members
E
MPOWERMENT AND
P
ERFORMANCE
25
being especially significant. Fourth, while works councils formally cannot
negotiate wages, their power, particularly in large firms, means that in prac-
tice some are able to achieve wage premiums.
Works Councils and Performance: The Arguments
In theory, the dual structure of industrial relations in Germany separates
issues of distribution from integration. This should both minimize the nega-
tive wage effects of the monopoly side of unions and maximize the positive
benefits of employee voice, the latter being provided largely through the
works council. The coverage of collective bargaining settlements extends to
all employees and hence there is no tendency for the wages of non-union
members to differ from union members. Moreover, differential treatment of
union and non-union members is ruled out constitutionally. The works
council can have the positive effects on the performance of the firm that
the union is assumed to have in Freeman and Medoff’s (1984) voice–exit
theory (e.g., by reducing labour turnover and its associated costs). Addition-
ally, works councils are oriented towards the survival of the firm and thus are
likely to be largely supportive of its long-term objectives. As Fitzoy and
Kraft (1987) argue, ‘if a significant efficiency–voice effect is anywhere plaus-
ible, then it is surely in the practice of the works council ... in West
Germany’ (p. 494).
Nonetheless, the bargaining over wages that works councils can in practice
enter into may have adverse effects on profits by increasing wages over and
above the competitive rate, or by delaying decisions. Also, while the works
council’s and management’s interest may coincide, they are distinct, and thus
at times the works council’s policies may conflict with those of management.
For example the works council’s support for recruitment of friends and rela-
tives of employees, or people that will fit in with the culture of the workplace
(Windolf, Wood, Horn, & Manwaring, 1988), may come into conflict with a
management concerned to develop new ways of working and seeking a more
creative and innovative workforce. In such ways the works council may well
have some of the negative effects on performance that are associated with the
restrictive side of trade unions. Moreover, works councils are not all alike.
Kotthoff (cited in Frege, 2002) outlines a typology that ranges from works
councils that are ignored or isolated to ones that are class conflictual. Between
these two extremes are various types of influential and cooperative works
councils. Thus, as for trade unions, predicting the overall effect of works
councils on performance is not straightforward.
Works Councils and Performance: The Evidence
Studies of the relationship of works councils with organizational performance
are analogous to those conducted on trade unions, but less numerous. A
26
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
major problem for researchers is that as the size of firms increases there are
barely any firms without work councils to act as comparators. In a recent
review of the literature Addison, Schnabel, and Wagner (2004) categorize the
studies in three phases, based primarily on the type of data sets used. In
effect the studies have been improving in terms of their ability to overcome
the problem of the size–works council relationship. Phase one studies are
characterized by small samples of firms using cross-sectional analysis.
Phase two involves regional and industry-specific studies. Phase three is
characterized by the use of truly representative data for the German
economy as a whole. A variety of outcome measures have been deployed,
and not all studies include productivity and/or profits as an outcome.
Phase one studies reveal a picture at odds with theory, in that works
councils tend to be associated with reduced productivity (Fitzoy & Kraft,
1987) and profitability (e.g., Addison & Wagner, 1997). Phase two studies,
however, present almost the opposite picture. Addison, Schnobel, and
Wagner (2001) and Huebler and Jirjahn (2001) both report a positive associa-
tion between the presence of works councils and productivity. However, in
the case of Addison, Schnabel, and Wagner (2001), the effect does not exist
for smaller establishments between 21 and 100 employees. Huebler and
Jirjahn, moreover, found that the effect only existed where the workplace
was covered by a collective agreement. The existence of a works council was
associated with higher wages but had no impact on the overall profitability.
Phase three results are conflicting. On the one hand, Frick (2001, 2002)
and Wolf and Zwick (2002) produce results that suggest that works councils
have a beneficial effect on productivity. On the other hand, Schank,
Schnabel, and Wagner (2002) and Addison, Bellman, Schnabel, and
Wagner (2004) find no effects. These last two are in many ways the most
sophisticated studies to date as the former concentrates on plants having
between 21 and 100 employees with a panel data from 1993–2000, and the
latter uses a formal matching model to compare establishments which ex-
perienced the formation of a works council during that period with those
without a works council throughout.
Overview
It is evident that the effect of works councils on firm performance remains
unclear. The difference between the first and subsequent phases could reflect
a change in the relationship over time. Such a time effect might reflect, for
example, the virtuous circle Rogers and Streeck (1994) highlight, whereby as
works councils mature the level of trust between management and the works
council increases and their positive effect grows accordingly. Alternatively
the change may result from a reduction in the power of works councils
with the increased international competition that the German economy has
faced. But it may equally reflect methodological factors. Further, likely
E
MPOWERMENT AND
P
ERFORMANCE
27
complicating factors are that the effect of works councils on performance are
not necessarily the same across all sizes of firms, nor are they unaffected by
the power of the union. In addition, as Addison, Schnabel et al. (2004)
suggest, the relationship may be affected by other employee involvement
and empowerment practices. These may be not unrelated to the presence
of works councils, which can encourage some practices (e.g., communication)
and discourage others (e.g., performance related pay). The fundamental
problem, as with the studies of trade unions, is that the level of analysis is
so general that it ignores a range of potentially important variables likely to
affect the results. Future research needs to take account of different features
and types of works councils, including the nature of their relationship with
trade unions. Simultaneously, there is a need for increased methodological
sophistication, with recent moves towards longitudinal studies examining
change (i.e., the adoption of works councils) to be encouraged.
EMBEDDED EMPOWERMENT
The term embedded empowerment denotes general management practices or
initiatives within which role and organizational empowerment practices are
the key, but not the sole, components. The most prominent current example
of embedded empowerment, on which we focus here, is that of HRM.
Empowerment within HRM
HRM is a term used to reflect a holistic or systemic approach to personnel
management that embraces the full range of activities concerned with the
recruitment, development, motivation, and management of employees. It in-
cludes, for example, personnel selection, training, communication, appraisal,
career development, performance monitoring, and payment systems, as well as
role (e.g., job design) and organizational (e.g., participation) empowerment
practices. The systemic approach entails characterizing the HRM system, and
thus adopting an organizational level of analysis.
Although, in principle, empowerment within HRM is no more prominent
than other aspects, in practice it is assigned a special and central role. Wood
and Wall (2002) identify two key assumptions driving contemporary work on
HRM. The first is that HRM systems are most usefully characterized in
terms of their departure from the traditional Tayloristic style (see also
Wood, 1999). That tradition emphasizes maximizing control over employees
through narrow and tightly specified jobs supported by task-focused
selection, training, and payment systems. The contrasting approach is one
emphasizing the involvement of employees by: investment in training and
development more generally, rather than for immediate needs; ensuring
good communications up and down the organization, rather than limiting
28
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
information on a need-to-know basis; and empowering employees through
job enrichment, self-managing teams, and participation.
Much of the theoretical justification for this approach to characterizing
HRM systems is based on research on role and organizational empowerment,
which are seen as harnessing employees’ energies and commitment towards
organizational goals. Benson and Lawler (2003), for example, argue that
‘From its beginnings in ‘‘industrial democracy’’ and ‘‘participative
management’’, employee involvement has evolved into an integrated
approach to work system design that supports employees having decision-
making authority’ (p. 156). Reflecting this perspective, authors have coined a
variety of terms to denote this form of HRM, such as high involvement
(Lawler, 1986), high commitment (Walton, 1985), progressive (Ichniowski,
1990), innovative (MacDuffie, 1995), human capital enhancing (Youndt,
Snell, Dean, & LePak, 1996), and high performance (Lawler, Mohrman, &
Ledford, 1995, 1998) management. We shall eschew such terms because they
all prejudge the mechanisms or outcomes of HRM, which as we will show,
have yet to be convincingly established. We retain the more neutral term
HRM.
The second, though not universally shared, assumption is that HRM
practices are mutually reinforcing. For example, teamworking without
good communications, or empowerment without wider investment in train-
ing and development, is expected to be of limited value. Bailey (1993) argued
that a strategy designed to empower employees needed three elements: (a) the
opportunity for employees to participate in substantive decisions through the
way work is organized; (b) employees with the skills to make their effort
meaningful; and (c) employees with the appropriate motivation to put forth
discretionary effort (see also Appelbaum, Bailey, Berg, & Kalleberg, 2000).
The basic assumption is that there are synergistic relationships among the
practices, with empowerment at the heart, with the whole being greater than
the sum of the parts.
HRM and Organizational Performance: The Evidence
Since 1990 more than twenty empirical studies have been published that
examine the performance effects of alternative HRM systems, contrasting
those that emphasize empowerment with those that do not. We will illustrate
the typical approach by describing two contrasting early studies.
Arthur (1994) collected information on HRM practices from a sample of 30
US mini steel mills using a questionnaire completed by human resource
managers. The questionnaire covered such factors as: decentralization (e.g.,
the degree to which non-supervisory employees monitor quality, costs, and
scrap), participation (e.g., the percentage of employees who meet on a regular
basis to discuss problems, and are involved in union–management or
employee–management committees), general training (e.g., skills training
E
MPOWERMENT AND
P
ERFORMANCE
29
not related to the employee’s current job, in communications and problem-
solving), and a number of other more specific features such as overall skill
levels, wage rates, and benefits. On the basis of this information, the mills
were categorized as having either control (n¼16) or commitment (n¼14)
HRM approaches. The commitment approach was characterized, for
example, by greater decentralization, more general training, higher skill
level, and lower bonus-related pay. Analyses of performance over the
previous year showed the mills with commitment human resource systems
had greater productivity, lower scrap rates, and lower labour turnover.
In contrast to Arthur’s small company, small sample, and industry-specific
study, Huselid (1995) examined the link between HRM practices and
performance in a heterogeneous sample of 968 larger US companies (over
100 employees, mean number of employees greater than 4,000). The focus
was on work practices labelled as ‘high performance’, which were taken to
include ‘comprehensive employee selection and recruitment procedures,
incentive compensation and performance management systems, and exten-
sive employee involvement and training’ (p. 635). Within that specification,
emphasis was placed on role empowerment in the form of practices that
‘encourage participation among employees and allow them to improve how
their jobs are performed’ (p. 636). Work practices were measured by
questionnaires completed by senior human resources professionals. Factor
analysis was used to identify two scales. One was labelled ‘employee skills
and organizational structures’ and comprised items covering such areas as the
proportion of employees included in formal information sharing, whose jobs
were subjected to job analysis, who completed attitude surveys, who
participated in quality circles or labour-management teams, and who were
covered by incentive plans. The shorter ‘employee motivation’ scale encom-
passed performance appraisal, performance-related pay, merit-related
promotion, and the number of qualified applicants for key vacancies. The
relationship between the labels and the content of the two scales is not totally
transparent. Scores on the two scales were then correlated with financial
measures of productivity (sales per employee), market value (Tobin’s Q),
and gross rate of return on assets (GRATE), obtained from publicly available
records. Findings showed that the employee motivation scale was associated
with productivity; the employee skills and organizational structures measure
was related to return on assets; and both scales were linked to market
value.
On the positive side, Arthur’s and Huselid’s studies support the view that
empowerment-oriented HRM systems are related to organizational perform-
ance. At the same time, however, they have important limitations. Although
in Arthur’s study the centrality of the empowerment element within the
overall measure is relatively clear, within Huselid’s it is not so transparent.
Developing this theme concerning the correspondence between concept and
measurement, in both cases it is unclear whether the effects observed can be
30
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
attributed to the totality of the HRM system or perhaps due to certain
components of it rather than others. Moreover, the HRM measures used
are quite different. Their validity is also unknown, as they are based on
reports from a single representative of each organization who may, or may
not, have detailed knowledge of the full range of practices covered. Likewise,
in Arthur’s study, the measure of performance was as reported by the same
respondent who provided the information on practices, thus it is of unknown
validity and open to the possibility of yielding associations with the HRM
measure because of response biases. Finally, both studies are cross-sectional,
and thus do not eliminate the possibility that better performance leads to
greater investment in HRM practices rather than vice versa.
That these problems apply more generally is shown in Table 1.1, which
offers an analysis of the main features of 18 of the principal empirical studies
in the field. Columns 1 and 2 identify the study by author and the basic
nature of the sample used. Column 3 describes the approach to measuring
HRM practices, with ‘reported’ in the body of the table encompassing
questionnaire, telephone survey, or face-to-face interview methods. For the
performance measure in column 4 we concentrate on indicators of economic
performance, which across studies, embrace such indices as productivity,
return on assets, return on capital, return on equity, profit, and general
measures of performance relative to competitors. The use of ‘objective’ in
the body of the table signifies the data were obtained from publicly available
audited accounts, whereas ‘reported’ denotes performance rated by the re-
spondent. We exclude from the analysis non-financial performance indicators
such as labour turnover and quality.
Under study design, in the fifth column of Table 1.1, ‘cross-sectional’
indicates single concurrent measures of HRM and performance (with
performance typically being for the previous financial period). ‘Quasi-
longitudinal’ applies to studies taking a single measurement of HRM prac-
tices and examines how this relates to subsequent performance having con-
trolled for previous performance. ‘Longitudinal’ is used for studies in which
change in HRM is related to change in performance. Under synergy test
(column 6) the entry is for conventional statistical tests for interactions
(e.g., using cross-product terms within regression) between two or more
components of HRM (e.g., investment in training and job enrichment). It
does not cover other interactions of wider theoretical interest, such as those
between HRM and company strategy or capitalization. Finally, under
performance effect (column 7) ‘yes’ signifies a statistically significant
relationship between HRM practices and any one performance indicator,
but does not necessarily indicate results are consistent across the two or
three outcome measures typically used.
The entries in Table 1.1 describe the main thrust of studies involved, but
cannot represent the more complex findings and nuances therein. Indeed,
there is much to commend in the individual studies included, as well as in
E
MPOWERMENT AND
P
ERFORMANCE
31
Table 1.1 Features of empirical studies on HRM and performance.
Study Sample HRM measure Performance measure Study design Synergy test Performance
effect
Arthur (1994) 30 mini steel mills Reported, single-source Same source, reported Cross-sectional No Yes
Guest and Hoque (1994) 119 manufacturers Reported, single-source Same source, reported Cross-sectional No No
Huselid (1995) 968 US companies Reported, single-source Objective Cross-sectional Partial Yes
MacDuffie (1995) 62 car plants Reported, single-source Objective Cross-sectional No Yes
Delaney and Huselid 590 for profit and non-profit Reported, single-source Same source, reported Cross-sectional Yes (none found) Yes
(1996) firms
Delery and Doty (1996) 216 banks Reported, single-source Objective Cross-sectional No Yes
Koch and McGrath 319 business units Reported, single-source Objective Cross-sectional No Yes
(1996)
Youndt et al. (1996) 97 manufacturers Reported, single-source Same source, reported Cross-sectional No Yes
Huselid, Jackson, and 293 firms Reported, single-source Objective Quasi-longitudinal No Yes
Schuler (1997)
Ichniowski, Shaw, and 36 steel lines Reported and observed, Objective Cross-sectional and No Yes
Prennushi (1997) multi-source longitudinal
Wood and de Menezes 1693 workplaces Reported, single-source Same source, reported Cross-sectional No No
(1998)
Hoque (1999) 209 hotels Reported, single-source Same source, reported Cross-sectional No Yes
Vandenberg, Richardson, 49 life insurers Reported, single-source Objective Cross-sectional No Yes
and Eastman (1999)
Wright, McCormick, 36 refineries Reported, single source Same source, reported Cross-sectional Yes (positive effect) No
Sherman, and
McMahan (1999)
Capelli and Neumark 666 manufacturers Reported, single-source Same source, reported Longitudinal Yes (none found) No
(2001)
Guthrie (2001) 164 firms Reported, single-source Same source, reported Cross-sectional No Yes
Orlando and Johnson 73 banks Reported, single-source Objective Cross-sectional No No
(2001)
Guest, Michie, Conway, 366 firms Reported, single-source Objective Quasi-longitudinal No No
and Sheehan (2003)
other empirical contributions not listed for reasons of space constraints (e.g.,
Appelbaum et al., 2000; Ichniowski, 1990; Way, 2002). Considered collec-
tively, however, this body of evidence has clear limitations, so caution should
be exercised in reaching any strong conclusion about the existence and
general applicability of an effect of HRM on performance.
A feature of the studies is that they have been conducted predominantly on
manufacturing or financial organizations (column 2) and little is known about
their generalizability to other sectors. The most obvious weakness, however,
is the measurement of HRM. As evident from column 3 of Table 1.1, with
only one exception (Ichniowski et al., 1997), investigators have relied on
reports from a single organizational source to characterize HRM. Such
reports may be quite accurate for some practices, such as whether or not
there is a pay incentive scheme, but for others, like job enrichment or
teamwork, they are likely to be less so. What appears to be teamwork to a
senior manager, for example, may be less evidently collaborative to those
supposedly working together. If such measures do include random error,
then their relationship with performance will be underestimated.
In addition, in half of the studies, performance has also been measured
through reports from respondents (column 4). Given that reported perform-
ance is often measured by ratings on items such as ‘how does your perform-
ance compare with that of your main competitors?’ there is plenty of scope
for error, as a result, for example, of mis-recollection of actual financial data,
or differing interpretations of what performance means. If random, such
error would further weaken the observed relationship between HRM and
performance. More troublesome, however, is the possibility of ‘common-
method response bias’. This is a risk in all studies using reported perform-
ance because the information on HRM has come from the same person. If
some respondents take an overpositive view of their organizations, and others
show the opposite tendency, then this factor alone will lead to a positive (but
spurious) relationship between HRM and performance. At present, we
simply cannot tell whether either of these measurement problems has
significantly affected the results.
Research design (see column 5) is also a collective weakness. Fourteen of
the 18 studies are solely cross-sectional, so the direction of causality between
HRM and performance cannot be determined. Two studies are quasi-
longitudinal (Huselid et al., 1997; Guest et al., 2003), in that they control
for prior performance when examining the relationship between HRM and
subsequent performance. This would seem to strengthen the basis for causal
interpretation, in that any effect of prior performance on the use of HRM
practices (e.g., higher profit leads to investment in training or selection)
would be removed. However, as Guest et al. (2003) argue, it could also
mask the effect of interest. If the practices actually measured had been
fully operational for some time (say four years) before the period covered
by the measure of prior performance (say two years), then they could already
E
MPOWERMENT AND
P
ERFORMANCE
33
have had their effect on performance. Thus controlling for prior performance
would remove the very effect being sought. The basic problem is that no
study measures the time of implementation of HRM practices, and this
omission limits causal interpretation. A key point is that only two studies
examine change in HRM and change in performance (Capelli & Neumark,
2001; Ichniowski et al., 1997). These yield contradictory performance find-
ings (positive and negative respectively), but a sample of two is a scant base
on which to draw conclusions.
Although theoretically the rationale is that the various components of
HRM are mutually reinforcing, with empowerment at the core, this aspect
has been neglected. Indeed, as shown in column 6 of Table 1.1, the hypoth-
esis of interactions among HRM practices has only been directly addressed in
4 of the 18 studies, and with mixed results. No special emphasis has been
placed on testing for interactions between the most direct measures of em-
powerment (e.g., job enrichment) and assumed supporting practices (e.g.,
selection and training). Correspondingly, and going beyond the evidence in
Table 1.1, few studies have examined the more parsimonious possibility that
just one or a few of the practices included within overall HRM measures
might account for any observed results. More generally, the link between
theory and practice within the studies is not strong. Although empowerment
is a central component of most authors’ conceptualization of performance
enhancing HRM systems, this is not always so prominent within the
measures used. Indeed, different authors, and even the same authors across
different studies, use different measures of HRM, weakening the opportunity
to synthesize findings.
A final point to note from Table 1.1 is that the findings for the relationship
between HRM and performance (column 7) are mixed, with two-thirds of the
studies revealing some evidence of an association, and one-third none at all.
If those findings were systematically related to the other characteristics of the
studies, for example more positive results for weaker research designs or only
in studies using reported measures of performance, then there would be some
basis for drawing conclusions—but they are not. Huselid’s observation on his
own study, that these ‘results are not entirely unambiguous’ (p. 662), applies
to the field more generally.
Strengthening the Evidence Base
The above analysis, together with that offered by others (e.g., Wood, 1999;
Wood & Wall, 2002; Wright & Gardner, 2003), leads to the conclusion that
studies so far are not conclusive with regard to the link between HRM and
performance. They provide encouraging evidence, but not a sound basis for
causal inference; nor do they establish whether or not empowerment is a key
ingredient.
For future studies there are four main priorities. The first, drawing on
34
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
traditional psychometric principles, is for multiple and independent ratings
of HRM practices and systems to enhance the reliability and validity of the
measurement of the independent variable(s). In particular, the use of experts
external to the organization is to be encouraged, because they are more likely
to know about the full range of possible development of relevant practices,
and thus can provide more sensitive ratings than internal respondents with
more restricted appreciation and vested interests.
The second priority is to improve the measurement of performance. Where
possible, objective measures should be deployed. Of course these can also
contain errors, as a result of such factors as the assumptions made about
depreciation rates, or bringing forward planned expenditure in good years
to offset tax or for cash-flow reasons (Smith, 1996). However, there are limits
to how far objective measures can deviate from real performance, especially
in the longer term, and they hold the advantage of being independent of
measures of HRM. Where objective measurement is not feasible, for
example where such data are not available for the chosen level of analysis
(e.g., plant) or type of organization (e.g., certain charitable and service organ-
izations), then attention should be paid to enhancing the reliability and
validity of reported measures, which should be elicited from sources inde-
pendent from those used to determine HRM practices. Ideally, both objec-
tive and reported measures of performance should be used, allowing greater
breadth of coverage and triangulation between the two on aspects where they
coincide.
The third requirement is for longitudinal studies, with repeated measures
of HRM and performance, and in which the date of introduction of HRM
practices is recorded. This will make it possible to relate known changes in
HRM to subsequent changes in performance. Particularly desirable would be
change studies investigating the long-term performance effects of major
HRM initiatives.
The final priority is to strengthen the links of theory with measurement
and analysis. There is a need to ensure that measures of HRM correspond to
the driving theoretical position, and to examine whether supposed mechan-
isms (e.g., employee motivation, involvement, or commitment) account for
any link with performance. Also of importance is to establish whether there
are synergistic relationships among theoretically constituent HRM practices
and if some practices are more salient than others, thus allowing more
parsimonious explanations.
CONCLUSIONS AND FUTURE DIRECTIONS
We have taken a wide lens to the relationship between empowerment and
performance, by spanning psychological, role, organizational, and embedded
empowerment perspectives. There are two benefits of this approach. One is
E
MPOWERMENT AND
P
ERFORMANCE
35
to suggest new or largely neglected lines of inquiry concerning how the
different perspectives on empowerment may inform one another. The
other is to help identify generic issues for future research by revealing
common methodological and theoretical limitations.
Linking the Empowerment Perspectives
Many essentially new lines of inquiry are suggested by considering the
interplay between the different perspectives on empowerment. Though the
development of psychological empowerment has its roots in role empower-
ment, and thus questions concerning their interrelationship have already
been framed, that is not the case for the relationship of either of them with
organizational or embedded empowerment.
In this respect a large number of questions arise, of which the following are
a sample. Do employees with greater organizational empowerment through
trade union representation or works councils experience greater psycho-
logical empowerment? Is such psychological empowerment limited to those
who are representatives, or does it extend to those whom they represent?
Similarly, to what extent does embedded empowerment through HRM
systems promote psychological empowerment? Is the promotion of psycho-
logical empowerment a necessary condition for other forms of empowerment
to affect performance? Are the different forms of situational empowerment
separate and distinct in their effects on psychological empowerment and
performance, or are the benefits of one (say role empowerment) enhanced
by the existence of the others (organizational and embedded empowerment)?
There is no need to extend the list of questions further. The essential point
is that, while research has been conducted largely within the separate
domains of psychological, role, organizational, and embedded empowerment,
there is much to be gained both methodologically and substantively by
opening up those borders.
Methodological and Theoretical Issues
Four methodological and substantive issues stand out as common to research
on empowerment. The first is the need for longitudinal change studies. The
vast majority of empirical research has relied on cross-sectional designs,
exclusively so in the case of psychological empowerment, and with only
occasional exceptions for organizational and embedded empowerment.
Even in the more established work on role empowerment, change studies
are the exception rather than the rule. This over-reliance on cross-sectional
evidence severely undermines causal interpretation. Future work should
redress this imbalance, which is likely to require different strategies for
the different empowerment perspectives. For psychological and role
empowerment, where the focus is on individual or group performance
36
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
within organizations, deliberate intervention studies are feasible. In the
case of organizational and embedded empowerment, greater reliance will
have to be placed on exploiting naturally-occurring change, by comparing
performance over time in organizations at different levels of development
with respect to empowerment, and especially for those who adopt or shed
organizational empowerment practices during the period of study.
The second issue concerns the need to improve measures of independent
and dependent variables. One aspect of this problem is over-reliance on self-
report, and often single-source, measures. This is especially evident for the
independent variables in studies of HRM as a form of embedded empower-
ment, where there is a clear need for objective measures of the HRM
practices, or at least ones based on multiple and independent respondents.
This requirement applies equally to studies of psychological empowerment
where, although there is no logical alternative to self-report and single-source
measures of the focal construct, this makes it even more important that
measure of antecedents and outcomes derive from objective or independent
sources. Much of the research on role empowerment displays the same weak-
ness. In many studies, this is compounded by the use of reported measures of
performance as outcome variables. In the absence of such improvement in
measures, observed relationships between empowerment and performance,
and especially those derived from cross-sectional data, leaves open the
interpretation that they result from response bias rather than representing
substantive findings.
Research on organizational empowerment is to some extent free of this self-
report measurement problem, because the approach has been to compare the
performance of those organizations with and without relevant provisions (e.g.,
trade unions or works councils). This body of work, however, highlights a
second measurement issue of wider relevance. This is the need to measure
practices not simply in terms of their existence, but also in terms of their
effective development. For instance, works councils in the case of organiza-
tional empowerment, HRM practices in the case of embedded empowerment,
or self-managing work teams in the case of role empowerment, can all exist
along a continuum from being notional or rudimentary to fully-fledged. It is
not unreasonable to assume that how well they are developed will affect their
impact on performance, or even that insufficient development could have a
worse effect than no use at all.
The third general issue concerns the question of mechanism, that is, why
and how empowerment affects performance. In the case of role empower-
ment, motivational mechanisms are traditionally assumed, and others have
been recently proposed. For organizational empowerment various mechan-
isms are hypothesized to link unions or works councils to overall financial
performance, including a union mark-up on wages and the provision for
employee voice. Embedded empowerment through HRM practices assumes
that performance gains arise by promoting organizational commitment,
E
MPOWERMENT AND
P
ERFORMANCE
37
employee involvement, skill, and competence. Finally, psychological empow-
erment can itself be seen as a possible mechanism through which the other
forms of empowerment affect performance and indeed is fundamentally based
on motivational assumptions. The important point about these mechanisms is
that they have featured strongly as justifications for expecting a relationship
between empowerment and performance empowerment, but rarely has their
role been directly scrutinized. The emphasis of research has been on the effect
of empowerment on performance, not on the extent to which alternative
mechanisms account for any such effect observed. That deficiency requires
redress, because explanation of why an effect occurs adds considerable weight
to evidence showing that it does occur. Moreover, such identification of
mechanisms provides insights into when effects are likely to be realized,
which leads to the next point.
Our final issue concerns contingencies, that is the circumstances under
which empowerment will have a lesser or greater effect on performance. A
feature of research on all four forms of empowerment is the variability of
findings. This strongly suggests the existence of third factors, or contin-
gencies. Among the contingencies proposed are self-esteem in the case of
psychological empowerment, production uncertainty for role empowerment
(Wall et al., 2002), product market competition and labour–management rela-
tions in the case of the trade unions as a form of organizational empowerment,
and organizational strategy for embedded empowerment in the form of HRM
systems. As was the case for mechanisms, however, there have been too few
systematic and concerted attempts to test these contingencies empirically.
Implementing the improvements recommended above to organizational
and embedded empowerment, where the focus is with the effect on the
performance of the enterprise as a whole, will require considerably greater
research resource than has been characteristic of individual studies to date.
Independent audits by multiple assessors, that provide detailed and differ-
entiated measures of say trade unions or HRM systems, are that much more
labour-intensive than simply recording the presence or absence of unions or
determining the use of HRM practices by questionnaires to single organiza-
tional representatives. Longitudinal studies similarly require substantial
research investment. If investigators take such requirements on board
without increased resources the result will be fewer or smaller scale
studies, and a consequent reduction in the accumulation of evidence. For
this reason it is desirable to look beyond individual studies to large-scale
collaborative ventures. Moreover, it is desirable to examine whether the
relationship of organizational and embedded empowerment practices with
performance differs by sector. It is possible, for example, that practices
that are most effective within manufacturing companies differ from those
that work for financial institutions or retailing organizations. Where indi-
vidual studies are conducted such evidence arises largely by chance rather
than by design.
38
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
Such considerations lead to the need for major national investigations, with
repeated audits of practices in large samples of organizations in all major
sectors, and with the resulting information integrated with existing national
databases on their economic performance. Research to date has helped justify
and set out the requirements for such ‘big science’, which would have the
potential to provide much more definitive answers. Its realization would
involve active collaboration between researchers, employer representative
bodies, and government agencies.
REFERENCES
Addison, J. T., Bellmann, L., Schnabel, C., & Wagner, J. (2002). German Works
Councils Old and New: Incidence, Coverage and Determinants (Working paper No.
495) Bonn, Germany: Labor IZA, University of Bonn.
Addison, J. T., Bellmann, L., Schnabel, C., & Wagner, J. (2004, in press). The
reform of the German Works Constitution Act: A critical appraisal. Industrial
Relations.
Addison, J. T., Schnabel, C., & Wagner, J. (2001). Works councils in Germany:
Their effects on establishment performance. Oxford Economic Papers,53,
659–694.
Addison, J. T., Schnabel, C., & Wagner, J. (2004, in press). The course of research
into the economic consequences of German works councils. British Journal of
Industrial Relations.
Addison, J. T., & Wagner, J. (1997). The impact of works councils on profitability
and innovation: New evidence from micro data. Jahrbuecher fuer Nationaloekono-
mie und Statistik,216, 1–20.
Appelbaum, E., Bailey, T., Berg, P., & Kalleberg, A. L. (2000). Manufacturing
Advantage: Why High Performance Work Systems Pay Off. New York: Cornell
University Press.
Argyris, C. (1998). Empowerment: The emperor’s new clothes. Harvard Business
Review,76, 98–105.
Arnold, J. A., Arad, S., Rhoades, J. A., & Drasgow, F. (2000). The empowering
leadership questionnaire: The construction and validation of a new scale for
measuring leader behaviors. Journal of Organizational Behaviour,21, 249–269.
Arthur, J. B. (1994). Effects of human resource systems on manufacturing perform-
ance and turnover. Academy of Management Journal,37, 670–687.
Bailey, T. (1993). Discretionary Effort and the Organization of Work: Employee
Participation and Work Reform since Hawthorne (Working Paper). New York:
Columbia University.
Banker, R. D., Field, J. M., Schroeder, R. G., & Sinha, K. K. (1996). Impact of
work teams on manufacturing performance: A longitudinal field study. Academy
of Management Journal,39, 867–890.
Belman, A. (1992). Unions, the quality of labor relations, and firm performance. In
L. Mishel, & P. B. Voos (eds), Unions and Economic Competitiveness. New York:
Armonk.
Benson, G. S., and Lawler, E. E. III (2003). Employee involvement: Utilization,
impacts and future prospects. In D. Holman, T. D. Wall, C. W. Clegg, P.
Sparrow, & A. Howard (eds), The New Workplace: A Guide to the Human
Impact of Modern Working Practices. London: John Wiley & Sons.
E
MPOWERMENT AND
P
ERFORMANCE
39
Berry, D. C., & Broadbent, D. E. (1984). On the relationship between task per-
formance and explicit verbalizable knowledge. Quarterly Journal of Experimental
Psychology,36, 209–231.
Blanchflower, D. (1999). Changes over time in union relative wage effects in Great
Britain and the United States. In S. Daniel, P. Arestis, & J. Grahl (eds), The
History and Practice of Economics: Essays in Honour of Bernard Corry and Maurice
Peston (Vol. 2). Northampton, MA: Edward Elgar.
Blanchflower, D., & Bryson, A. (2003). Changes over time in union relative wage
effects in the UK and the US revisited. In J. T. Addison, & C. Schnabel (eds),
International Handbook of Trade Unions. Cheltenham, UK: Edward Elgar.
Booth, A. L., & Bryan, M. L. (2001). The Union Membership Wage-premium Puzzle:
Is There a Free Rider Problem? (Mimeo). Colchester, UK: Institute for Social and
Economic Research, University of Essex.
Bratsberg, B., & Ragan, J. F. (2002). Changes in the union wage premium by
industry: Data and analysis. Industrial and Labor Relations Review,56, 65–83.
Braverman, H. (1974). Labour and Monopoly Capital. New York: Monthly Review
Press.
Campion, M. A., & McClelland, C. L. (1993). Follow-up and extension of the inter-
disciplinary costs and benefits of enlarged jobs. Journal of Applied Psychology,78,
339–351.
Capelli, P., & Neumark, D. (2001). Do ‘high performance’ work practices improve
establishment-level outcomes? Industrial and Labour Relations Review,54,
737–775.
Clegg, C. W., Wall, T. D., Pepper, K., Stride, C. B., Woods, D., Morrison, D.,
Cordery, J. L., Couchman, P., Badham, R., Kuenzler, C., Grote, G., Ide, W.,
Takahashi, M., & Kogi, K. (2002). An international survey of the use and effec-
tiveness of modern manufacturing practices. Human Factors and Ergonomics in
Manufacturing,12, 171–191.
Cohen, S. G., & Bailey, D. E. (1997). What makes teams work: Group effectiveness
research from the shop floor to the executive suite. Journal of Management,23,
239–290.
Conger, J., & Kanungo, R. (1988). The empowerment process: Integrating theory
and practice. Academy of Management Review,13, 471–482.
Cook, J. D., Hepworth, S. J., Wall, T. D., & Warr, P. B. (1981). The Experience of
Work: A Compendium and Review of 249 Measures and their Use. London:
Academic Press.
Cordery, J. L., Wright, B. H., & Wall, T. D. (1997). Production uncertainty and
self-managing work team performance. 12th Annual APA Conference of the
Section for Industrial and Organizational Psychology,St Louis,MO.
Daft, R. L. (1998). Organization Theory and Design. Cincinnati, OH: South-
Western College Publishing.
Dean, J. W., Jr., Brandes, P., & Dharwadkar, R. (1998). Organizational cynicism.
Academy of Management Review,23, 341–352.
Delaney, J. T., & Huselid, M. A. (1996). The impact of human resource manage-
ment practices on perceptions of organizational performance. Academy of Man-
agement Journal,39, 919–969.
Delery, J. E., & Doty, D. H. (1996). Modes of theorizing in strategic human
resource management: Tests of universalistic, contingency, and configurational
performance predictions. Academy of Management Journal,39, 802–835.
Doucouliagos, C., & Laroche, P. (2000). What Do Unions Do to Productivity? A
Meta-analysis (Cahier de recherche no. 2000-5). Nancy, France: GREFIGE,
University of Nancy.
40
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
Drucker, P. (1988). The coming of the new organization. Harvard Business Review,
66, 45–53.
Emery, F. E., & Thorsrud, E. (1969). Form and Content in Industrial Democracy.
London: Tavistock Publications.
Fenton-O’Creevy, M. (1995). Empowerment. In N. Nicholson (ed.), Encyclopedic
Dictionary of Organizational Behavior (p. 155). Oxford: Blackwell.
Fenton-O’Creevy, M., Wood, S., & Callerot, E. (1998). Employee Involvement within
European Multinationals. Uxbridge, UK: European Works Council Study Group.
Fitzoy, F., & Kraft, K. (1985). Unionization, wages, and efficiency: Theories and
evidence from the US and West Germany. Kyklos,38, 537–554.
Fitzoy, F., & Kraft, K. (1987). Efficiency and internal organization: Works councils
in West German firms. Economica,54, 493–504.
Forth, J., & Millward, N. (2002). The Growth of Direct Communication. London:
Chartered Institute of Personnel and Development.
Freeman, R. B., & Medoff, J. L. (1984). What Do Unions Do? New York: Basic
Books.
Frege, C. (2002). A critical assessment of the theoretical and empirical research on
German works councils. British Journal of Industrial Relations,40, 221–248.
Frese, M., & Zapf, D. (1994). Action as the core of work psychology: A German
approach. In H. C. Triandis, M. D. Dunnette, & J. M. Hough (eds), Handbook of
Industrial and Organizational Psychology (Vol. 4, 2nd edn.). Palo Alto, CA:
Consulting Psychologists Press.
Frick, B. (2001). High Performance Practices und betriebliche Mitbestimmung:
Komplementa
¨r oder substitutiv?—Empirische Befunde fu
¨r den deutschen Maschinen-
bau (Wittener Diskussionspapiere, Heft Nr. 88). Witten, Germany: University of
Witten-Herdecke.
Frick, B. (2002). Mandated codetermination, voluntary profit sharing and firm per-
formance (Mimeo). Wilten, Germany: University of Witten-Herdecke.
Fulford, M. D., & Enz, C. A. (1995). The impact of empowerment on service
employees. Journal of Management Studies,7, 161–175.
Gagne
´, M., Senecal, B. C., & Koestner, R. (1997). Proximal job characteristics,
feelings of empowerment and intrinsic motivation: A multi-dimensional model.
Journal of Applied Social Psychology,27, 1222–1240.
Gospel, H., & Willman, P. (2003). Dilemmas in worker representation: Information,
consultation and negotiation. In H. Gospel, & S. Wood (eds), Representing
Workers. London: Routledge.
Guest, D., & Hoque, K. (1994). The good, the bad and the ugly: Employee relations
in new non-union workplaces. Human Resource Management Journal,5, 1–14.
Guest, D., Michie, J., Conway, N., & Sheehan, M. (2003). Human resource
management and performance: Some evidence from the UK. British Journal of
Industrial Relations,41, 291–314.
Guthrie, J. P. (2001). High involvement work practices, turnover and productivity:
Evidence from New Zealand. Academy of Management Journal,44, 180–192.
Hacker, W. (1985). Activity: A fruitful concept in industrial psychology. In M.
Frese, & J. Sabini (eds), Goal Directed Behavior: The Concept of Action in
Psychology. Hillsdale, NJ: Erlbaum.
Hackman, J. R., & Oldham, G. R. (1975). Development of the Job Diagnostic
Survey. Journal of Applied Psychology,60, 159–170.
Hackman, J. R., & Oldham, G. R. (1976). Motivation through the design of work:
Test of a theory. Organizational Behaviour and Human Performance,16, 250–279.
Hardy, C., & Leiba-O’Sullivan, S. (1998). The power behind empowerment: Impli-
cations for research and practice. Human Relations,51, 451–483.
E
MPOWERMENT AND
P
ERFORMANCE
41
Hassel, A. (1999). The erosion of the German system of industrial relations. British
Journal of Industrial Relations,27, 483–505.
Herzberg, F. (1966). Work and the Nature of Man. Cleveland: World Publishing.
Hirschman, A. O. (1971). Exit,Voice,and Loyalty. Cambridge, MA: Harvard
University Press.
Hodgkinson, G. P. (2003). The Interface of Cognitive and Industrial, Work and
Organizational Psychology. Journal of Occupational and Organizational Psychol-
ogy,76, 1–26.
Hoque, K. (1999). Human resource management and performance in the UK hotel
industry. British Journal of Industrial Relations,37, 419–443.
Huebler, O., & Jirjahn, U. (2001). Works Councils and Collective Bargaining in
Germany: The Impact on Productivity and Wages (Discussion Paper No. 332).
Bonn, Germany: Labor IZA, University of Bonn.
Huselid, M. A. (1995). The impact of human resource management practices on
turnover, productivity, and corporate financial performance. Academy of Manage-
ment Journal,38, 635–672.
Huselid, M. A., & Becker, B. E. (2000). Comment on ‘Measurement error in
research on the human resources and firm performance relationship: How
much error is there and how does it influence effect size estimates?’ Personnel
Psychology,53, 835–854.
Huselid, M. A., Jackson, S. E., & Schuler, R. S. (1997). Technical and strategic
human resource management effectiveness as a determinant of firm performance.
Academy of Management Journal,40, 171–188.
Ichniowski, C. (1990). Human Resource Management Systems and the Performance of
US Manufacturing Businesses (Working Paper No. 3449). Cambridge, MA:
National Bureau of Economic Research.
Ichniowski, C., Shaw, K., & Prennushi, G. (1997). The effects of human resource
management practices on productivity. American Economic Review,87, 291–313.
Jackson, P. R., & Wall, T. D. (1991). How does operator control enhance perform-
ance of advanced manufacturing technology? Ergonomics,34, 1301–1311.
Jacobi, O., Keller, B., & Mu
¨ller-Jentsch, W. (1998). Germany: Codetermining the
future. In A. Ferner, & R. Hyman (eds), Changing Industrial Relations in Europe.
Oxford: Blackwell.
Kanter, R. M. (1989). The new managerial work. Harvard Business Review,67,
85–92.
Karasek, R. A., & Theorell, T. (1990). Healthy work: Stress,Productivity,and the
Reconstruction of Working Life. New York: Basic Books.
Kelly, J. E. (1992). Does job re-design theory explain job re-design outcomes?
Human Relations,45, 753–774.
Kirkman, B. L., & Rosen, B. (1999). Beyond self-management: Antecedents and
consequences of team empowerment. Academy of Management Journal,42, 58–74.
Koch, M. J., & McGrath, R. G. (1996). Improving labor productivity: Human
resource management policies do matter. Strategic Management Journal,17,
335–354.
Kochan, T. A., Katz, H. C., & McKersie, R. B. (1986). The Transformation of
American Industrial Relations. New York: Basic Books.
Kraimer, M. L., Sibert, S. E., & Liden, R. C. (1999). Psychological empowerment
as a multidimensional construct: A test of construct validity. Educational and
Psychological Measurement,59, 127–142.
Laschinger, H. K. S., Finegan, J., Shamian, J., & Almost, J. (2001). Testing
Karasek’s demands-control model in restructured healthcare settings: Effects of
42
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
job strain on staff nurses; quality of work life. Journal of Nursing Administration,
31, 233–243.
Lawler, E. E. (1986). High Involvement Management. San Francisco: Jossey-Bass.
Lawler, E. E. (1992). The Ultimate Advantage: Creating High-Involvement Organ-
ization. San Francisco: Jossey-Bass.
Lawler, E. E., Mohrman, S. A., & Ledford, G. E., Jr. (1995). Creating High Per-
formance Organizations. San Francisco: Jossey-Bass.
Lawler, E. E., Mohrman, S. A., & Ledford, G. E., Jr. (1998). Strategies for High
Performance Organizations. San Francisco: Jossey-Bass.
Leach, D. J., Wall, T. D., & Jackson, P. R. (2003). The effect of empowerment on
job knowledge: An empirical test involving operators of complex technology.
Journal of Occupational and Organizational Psychology,76, 27–52.
Lewis, H. G. (1986). Union Relative Wages Effects. Chicago: University of Chicago
Press.
Liden, R. C., & Arad, S. (1996). A power perspective of empowerment and work
groups: Implications for human resource management research. Research in
Personnel and Human Resource Management,14, 205–251.
Liden, R. C., Wayne, S. J., & Sparrowe R. T. (2000). An examination of the
mediating role of psychological empowerment on the relations between the job,
interpersonal relationships and work outcomes. Journal of Applied Psychology,85,
407–416.
Likert, R. (1961). New Patterns of Management. New York: McGraw-Hill.
Little, B. L., & Madigan, R. M. (1997). The relationship between collective efficacy
and performance in manufacturing work teams. Small Group Research,28,
517–534.
Locke, E. A., & Schweiger, D. M. (1979). Participation in decision-making: One
more look. In B. M. Staw (ed.), New Directions in Organizational Behavior (Vol.
1, pp. 265–339). Greenwich, CT: JAI Press.
London, M. (1993). Relationships between career motivation, empowerment and
support for career development. Journal of Occupational and Organizational Psy-
chology,66, 55–69.
MacDuffie, J. P. (1995). Human resource bundles and manufacturing performance:
Organizational logic and flexible production systems in the world auto industry.
Industrial and Labour Relations Review,48, 197–221.
Machin, S., & Wadhwani, H. (1991). The effects of unions on organizational change
and employment. Economic Journal,101, 835–854.
McGregor, D. (1960). The Human Side of Enterprize. New York: McGraw-Hill.
Menon, S. T. (2001). Employee empowerment: An integrative psychological
approach. Applied Psychology: An International Review,50, 153–180.
Metcalf, D. (1989). When water notes dry up. British Journal of Industrial Relations,
27, 1–32.
Metcalf, D. (2003). Unions and productivity, financial performance and investment:
International evidence. In J. T. Addison, & C. Schnabel (eds), International
Handbook of Trade Unions. Cheltenham, UK: Edward Elgar.
Niedenhoff, H-U., & Pege, W. (1989). Gewerkschaftshandbuch 1989/90. Cologne,
Germany: Deutscher Instituts-Verlag.
Orlando, C. R., & Johnson, N. B. (2001). Strategic human resource management
effectiveness and firm performance. International Journal of Human Resource
Management,12, 299–310.
Parker, S. K. (1998). Role breadth self-efficacy: Relationship with work enrichment
and other organizational practices. Journal of Applied Psychology,83, 835–852.
E
MPOWERMENT AND
P
ERFORMANCE
43
Parker, S. K., & Axtell, C. M. (2002). Seeing another point of view: Antecedents
and outcomes of employee perspective taking. Academy of Management Journal,
44, 1085–1100.
Parker, S. K., & Wall, T. D. (1998). Job and Work Design: Organizing Work to
Promote Well-Being and Effectiveness. London: Sage.
Parker, S. K., Wall, T. D., & Cordery, J. L. (2001). Future work design research
and practice: Towards an elaborated model of work design. Journal of Occupa-
tional and Organizational Psychology,74, 413–440.
Parker, S. K., Wall, T. D., & Jackson, P. R. (1997). ‘That’s not my job’: Devel-
oping flexible employee work orientations. Academy of Management Journal,40,
899–929.
Peters, T., & Waterman, R. (1982). In Search of Excellence. New York: Harper
Row.
Pfeffer, J. (1994). Competitive Advantage Through People. Boston: Harvard Univer-
sity Press.
Piore, M., & Sabel, C. (1983). The Second Industrial Divide. New York: Basic
Books.
Poole, M. (1986). Towards a New Industrial Democracy: Workers’ Participation in
Industry. London: Routledge and Kegan Paul.
Robbins, T. L., Crino, M. D., & Fredendall, L. D. (2002). An integrative model of
the empowerment process. Human Resource Management Review,12, 419–443.
Roethlisberger, F. J., & Dickson, W. J. (1939). Management and the Worker: An
Account of a Research Program Conducted at the Western Electric Company
Hawthorne Works,Chicago. Boston: Harvard University Press.
Rogers, J., & Streeck, W. (1994). Works Councils. Chicago: University of Chicago
Press.
Rose, M. (1978). Industrial Behaviour. Harmondsworth, UK: Penguin.
Royal Commission (1968). Report of the Royal Commission on Trade Unions and
Employee Associations (Donnovan Report). London: HMSO.
Schank, T., Schnabel, C., & Wagner, J. (2002). Works Councils—Sand or Grease in
the Operation of German Firms? (Working Paper No. 281). Lu
¨neburg, Germany:
Faculty of Economics and Social Sciences, University of Lu
¨neburg.
Siegal, M., & Gardner, S. (2000). Contextual factors of psychological empower-
ment. Personnel Review,29, 703–722.
Smith, T. (1996). Accounting for Growth: Stripping the Camouflage from Company
Accounts. London: Random House.
Spreitzer, G. M. (1995a). Psychological empowerment in the workplace:
Dimensions, measurement, and validation. Academy of Management Journal,38,
1442–1465.
Spreitzer, G. M. (1995b). An empirical test of a comprehensive model of intraper-
sonal empowerment in the workplace. American Journal of Community Psychology,
23, 601–629.
Spreitzer, G. M. (1996). Social structural characteristics of psychological empower-
ment. Academy of Management Journal,39, 483–504.
Spreitzer, G. M., Kizilos, M. A., & Nason, S. W. (1997). A dimensional analysis of
the relationship between psychological empowerment and effectiveness, satisfac-
tion, and strain. Journal of Management,23, 679–704.
Stevens, M. J., & Campion, M. A. (1999). Staff work teams: Development and
validation of a selection test for teamwork settings. Journal of Management,25,
207–228.
Susman, G., & Chase, R. (1986). A sociotechnical systems analysis of the integrated
factory. Journal of Applied Behavioural Science,22, 257–270.
44
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
Taylor, F. W. (1911). The Principles of Scientific Management. New York: Harper.
Thomas, K. W., & Velthouse, B. A. (1990). Cognitive elements of empowerment:
An ‘interpretive’ model of intrinsic task motivation. Academy of Management
Review,15, 666–681.
Towers, B. (1973). Worker participation in management: An appraisal and some
comments. Industrial Relations Journal,4, 4–12.
Trist, E. L., & Bamforth, K. W. (1951). Some social and psychological conse-
quences of the long-wall method of coal-getting. Human Relations,4, 3–38.
TUC (1966). Trade Unionism: The evidence of the Trades Union Congress to the
Royal Commission on Trade Unions and Employers Associations. Report of the
Royal Commission on Trade Unions and Employee Associations. London: TUC.
Vandenberg, R. J., Richardson, H. A., & Eastman, L. J. (1999). The impact of high
involvement work processes on organizational effectiveness. Group and Organiza-
tion Management,24, 300–339.
Wageman, R. (1997). Critical success factors for creating superb self-managing
teams. Organizational Dynamics,26, 37–49.
Wagner, J. A., Leana, C. R., Locke, E. A., & Schweiger, D. M. (1997). Cognitive
and motivational frameworks in U.S. research on participation: A meta-analysis
of primary effects. Journal of Organizational Behaviour,18, 49–65.
Wall, T. D., & Martin, R. (1987). Job and work design. In C. L. Cooper, & I. T.
Robertson (eds), International Review of Industrial and Organizational Psychology.
Chichester, UK: John Wiley & Sons.
Wall, T. D., Corbett, J. M., Martin, R., Clegg, C. W., & Jackson, P. R. (1990).
Advanced manufacturing technology, work design and performance: A change
study. Journal of Applied Psychology,75, 691–697.
Wall, T. D., Cordery, J. L., & Clegg, C. W. (2002). Empowerment, performance
and operational uncertainty: A theoretical integration. Applied Psychology: An
International Review,51, 146–169.
Wall, T. D., Jackson, P. R., & Davids, K. (1992). Operator work design and
robotics system performance: A serendipitous field study. Journal of Applied
Psychology,77, 353–362.
Wall, T. D., Kemp, N. J., Clegg, C. W., & Jackson, P. R. (1986). An outcome
evaluation of autonomous work groups: A long-term field experiment. Academy of
Management Journal,29, 280–304.
Walton, R. E. (1985). From control to commitment in the workplace. Harvard
Business Review,63, 77–84.
Warr P. B., & Wall, T. D. (1975). Work and Well-being. Harmondsworth, UK:
Penguin.
Waterson, P. E., Clegg, C. W., Bolden, R., Pepper, K., Warr, P. B., & Wall, T. D.
(1999). The use and effectiveness of modern manufacturing practices: A survey of
UK industry. International Journal of Production Research,37, 2271–2292.
Way, S. A. (2002). High performance work systems and intermediate indicators of
firm performance within the US small business sector. Journal of Management,
28, 765–785.
Wilkinson, A. (1998). Empowerment theory and practice. Personnel Review,27,
40–56.
Wilkinson, A., Marchington, M., Ackers, P., & Goodman, J. (1992). Total quality
management and employee involvement. Human Resource Management Journal,2,
1–20.
Windolf, P., Wood, S. J., Horn, H. W., & Manwaring, T. (1988). Recruitment and
Selection in the Labour Market. Aldershot, UK: Avebury.
E
MPOWERMENT AND
P
ERFORMANCE
45
Wolf, E., & Zwick, T. (2002). Reassessing the Impact of High Performance Work-
places (Centre for Economic Research Discussion Paper No. 02-07). Mannheim,
Germany: Mannheim University.
Wood, S. J. (1999). Human resource management and performance. International
Journal of Management Reviews,1, 367–413.
Wood, S. J., & de Menezes, L. (1998). High commitment management in the UK:
Evidence from the Workplace Industrial Relations Survey and the Employers’
Manpower and Skills Practices Survey. Human Relations,51, 485–515.
Wood, S. J., & Wall, T. D. (2002). Human resource management and business
performance. In P. B. Warr (ed.), Psychology at Work (5th edn). Harmondsworth,
UK: Penguin.
Wood, S. J., Stride, C. B., Wall, T. D., & Clegg, C. W. (2003). Revisiting the Use
and Effectiveness of Modern Management Practices. (Working paper). Sheffield,
UK: Institute of Work Psychology, University of Sheffield.
Wright, P. M., & Gardner, T. M. (2003). The human resource-firm performance
relationship: Methodological and theoretical challenges. In D. Holman, T. D.
Wall, C. W. Clegg, P. Sparrow, & A. Howard (eds), The New Workplace: A
Guide to the Human Impact of Modern Working Practices. London: John Wiley
& Sons.
Wright, P. M., McCormick, B., Sherman, W. S., & McMahan, G. C. (1999). The
role of human resource practices in petro-chemical refinery performance. Inter-
national Journal of Human Resource Management,10, 551–571.
Youndt, M. A., Snell, S. A., Dean, J. E., & Lepak, D. P. (1996). Human resource
management, manufacturing strategy, and firm performance. Academy of Man-
agement Journal,39, 836–865.
46
I
NTERNATIONAL
R
EVIEW OF
I
NDUSTRIAL AND
O
RGANIZATIONAL
P
SYCHOLOGY
2004
... To understand the processes that lead from variations in OPCE to the inducement of either effectuation or causation, it seems worthwhile to contemplate psychological literature as behaviours are generally known to be impacted by the focal actors motivations (Heckhausen and Heckhausen, 2010;Vroom, 1964). Herein psychological empowerment of the individual to solve tasks (Conger and Kanungo, 1988) has been a major aspect of scientific discourse (Wall et al., 2004), especially with regards to innovative and proactive behaviours (Campbell, 2000;Spreitzer, 1995). The multifaceted concept of psychological empowerment captures aspects of motivation depending on the perceptions of the individual with regard to his/her willingness, competence, ability and impact prospects in a specific task situation (Thomas and Velthouse, 1990). ...
... Psychologists have lately focused on the concept of psychological empowerment (Wall et al., 2004) as an important consequence of the empowerment climate at the organisational unit level (Seibert et al., 2004). Empowerment was thereby first defined as motivational concept of self-efficacy (Conger and Kanungo, 1988). ...
Article
Entrepreneurship literature acknowledges the applicability of effectuation and causation as entrepreneurial approaches to illuminate how corporate entrepreneurs develop ideas. However, it still lacks empirical evidence on how organisational factors, such as the organisational preparedness for corporate entrepreneurship (OPCE), influence the choice of entrepreneurial approaches. Within this respect, psychological empowerment of individuals to solve tasks has been a major aspect of scientific discourse, as especially innovative and proactive behaviours are generally known to be impacted by the focal actors’ motivations. Hence, this study investigates how organisational factors affect psychological empowerment as motivational precondition that determines the application of entrepreneurial approaches. Based on data of 522 experimental observations, component-based structural equation modelling was applied to examine the aforementioned research questions. The findings of this study reveal that providing work discretion, top management support, time and rewards empowers employees, which subsequently enhances effectual and decreases causational approaches.
... Although, literature on empowerment abounds, empirical work on its contribution to firm performance has generated mixed findings, posing a challenge to organisations wanting to implement empowerment programmes (Wall, Wood & Leach, 2005). Findings include the improper handling of power that is allocated to subordinates, a lack of supervision and the achievement of limited results (Turkmenoglu, 2019). ...
Article
Full-text available
Purpose:The aim of the study is to assess the mediating role of employee engagement and organisational citizenship behaviour on the relationship between employee empowerment (structural, psychological) and organisational performance in non-commercial banks in Ghana. Design/Methodology/ approach: SEM (EQS) was used to test the proposed hypothesis based on 304 employees selected from eight non-commercial banks in the Bono Region, Ghana. Findings: Organisational citizenship behaviour was a significant mediator on the relationship between employee empowerment (structural and psychological) and organisational performance. However, employee engagement showed no positive effect on the relationship between employee empowerment (structural, psychological) and organisational performance. Research limitations/Implications: This study assists managers and leaders to understand how employee empowerment influences organisational performance in the current business environment. The study was conducted in a particular area; Ghana, making it difficult to generalise the results across other countries. Practical implication: The study provides practical knowledge to managers and leaders on the role of organisational citizenship behaviour and employee engagement on the relationship between employee empowerment (structural, psychological) and organisational performance that facilitates the decision-making process. Originality and value: The originality of the present study relays on the interaction among structural and psychological empowerment, organisational citizenship behaviour, employee engagement and organisational performance in a developing economy where this research has not been done before.
... Employee involvement is widely seen as having two dimensions, defined by their focus. First is role or job involvement, which concentrates on employees' core jobs, and is concerned with ensuring they have an element of autonomy and responsibility in their jobs (Wall et al. 2004;Wood et al. 2012). Second is organizational involvement, which entails employees participating in decision-making beyond the narrow confines of their jobs, so they are involved in work-organization decisions, other immediate aspects of their environment, and the 'business as a whole' (Benson and Lawler 2003: 156);or, in Wall et al.'s (2004: 19) terms, employees having 'a say in decisions about the management and strategy of their organization'. ...
Article
Full-text available
Differences in the treatment of involvement in the human resource management (HRM)–performance research stream have been underplayed, as commentaries concentrate on showing that HRM produces a performance premium, and more recently on exploring the mechanisms explaining this. This paper first identifies the two initial concerns of the research stream – the value of employee involvement and the holistic treatment of HRM – and the way these are joined to present a unified view of the area. It then reviews the studies, confirming that involvement has been underplayed or neglected completely, and is only prioritized in a minority. A divide is identified between HRM as an orientation towards fostering employee involvement – seen as a managerial philosophy – and as a technology – a set of practices constituting high‐performance work systems. The paper then argues that acknowledgement of this divide matters, and concludes by drawing out some implications for how we should progress the research stream.
... Contextual factors can influence both structural levels of empowerment (Wall et al., 2004) and an individual's psychological empowerment (Seibert et al., 2004). The Typology of Youth Participation and Empowerment (TYPE) Pyramid (N. ...
Article
This study examined the moderating effect of youth-adult partnerships (YAPs) on the relationship between youth empowerment in the community and youth’s creative self-efficacy (CSE). A survey was administered to 2,653 youth recruited from youth service centers in Hong Kong, which measured youth empowerment in the community, perceived YAPs in youth services, and CSE. The results indicated positive associations between youth empowerment in the community and youth’s CSE and between YAPs and CSE. There was also an interaction effect between youth empowerment and YAPs on youth’s CSE, where the effect of youth empowerment was stronger for youth who experienced higher perceived levels of YAPs. This suggests an amplification effect of YAPs on the relationship between youth empowerment in the community and CSE. Overall, the present findings support a way for community-based youth services to empower youth and to facilitate creative developmental outcomes and initiatives among young people by enhancing YAPs.
... The notion of psychological empowerment has gained increased popularity in the management field and has been empirically investigated over the last two decades (e.g., Menon, 2001;Spreitzer, 1995;Wall, Wood & Leach, 2004). Empirical work supports the positive relevance of psychological empowerment to different facets of human life such as, national development, and improved psychological well-being (Oladipo, 2009), better work performance of employees in small and medium enterprise sector (Degago, 2014;Wang & Zhang, 2012), job devotion even under high job insecurity (Stander & Rothmann, 2010), work motivation (Spreitzer, Kizilos, & Nason., 1997), and organizational commitment (Hashmi & Naqvi, 2012). ...
Article
Full-text available
The current research was carried out to construct a measure of global psychological empowerment for women based on Thomas and Velthouse (1990) empowerment model. Development of the scale entailed three independent studies. In Study 1, the exploratory factor analysis was run on 202 women of age range 22 and 60 years (M = 39.50, SD = 10.70) and 21 items were retained for 5 well-defined factors. The alpha coefficient was .86 for the overall scale and, .64-.84 for subscales. Total variance accounted for by the scale was 45.20%. Study 2 was carried out on 500 women of age ranged between 21-60 year (M = 38.50, SD = 9.40) to confirm the factor structure that was retained in study 1. The confirmatory factor analysis showed a good fit for the model. The convergent validity of the scale was determined by finding correlations of the scores on a newly constructed scale with the scores on Psychological Empowerment Questionnaire for Employees (Spreitzer, 1995), and Satisfaction with Life Scale (Diener, Emmons, Larsen, & Griffin, 1985) in Study 3. It was concluded that the newly constructed scale had a promising validity and reliability.
... The notion of psychological empowerment has gained increased popularity in the management field and has been empirically investigated over the last two decades (e.g., Menon, 2001;Spreitzer, 1995;Wall, Wood & Leach, 2004). Empirical work supports the positive relevance of psychological empowerment to different facets of human life such as, national development, and improved psychological well-being (Oladipo, 2009), better work performance of employees in small and medium enterprise sector (Degago, 2014;Wang & Zhang, 2012), job devotion even under high job insecurity (Stander & Rothmann, 2010), work motivation (Spreitzer, Kizilos, & Nason., 1997), and organizational commitment (Hashmi & Naqvi, 2012). ...
Article
Full-text available
The current research was carried out to construct a measure of global psychological empowerment for women based on Thomas and Velthouse (1990) empowerment model. Development of the scale entailed three independent studies. In Study 1, the exploratory factor analysis was run on 202 women of age range 22 and 60 years (M = 39.50, SD = 10.70) and 21 items were retained for 5 well-defined factors. The alpha coefficient was .86 for the overall scale and, .64-.84 for subscales. Total variance accounted for by the scale was 45.20%. Study 2 was carried out on 500 women of age ranged between 21-60 year (M = 38.50, SD = 9.40) to confirm the factor structure that was retained in study 1. The confirmatory factor analysis showed a good fit for the model. The convergent validity of the scale was determined by finding correlations of the scores on a newly constructed scale with the scores on Psychological Empowerment Questionnaire for Employees (Spreitzer, 1995), and Satisfaction with Life Scale (Diener, Emmons, Larsen, & Griffin, 1985) in Study 3. It was concluded that the newly constructed scale had a promising validity and reliability.
... Hribar and Mendling, 2014;Hernaus et al., 2016), we add empirical evidence regarding the individual level of employees to achieve a behavioral change toward a process-oriented organizational culture. Finally, we describe a possibility how to foster job designs that are related to high involvement management by emphasizing the individual contribution (Wall et al., 2004). ...
Article
Purpose Process-oriented behavior is a prerequisite for transforming a company into a process-oriented organization, but is difficult to achieve among employees. The purpose of this paper is to examine the effectiveness of role plays on adapting process-oriented behavior in daily work practices. Design/methodology/approach Using the theory of cognitive dissonance, the authors investigate whether role plays are an effective learning method. This study was conducted over a period of two years and included 212 participants of a financial services provider. Findings The results reveal that the role play used had a persistent impact on employees’ process-oriented behavior in terms of their process knowledge, their cross-functional coordination, and their continuous process reflection, but not on their process awareness. Thus, the authors conclude that despite high application costs, role plays are beneficial for financial services companies to train their employees. Research limitations/implications While the data stem from participants within one financial service provider only, this study contributes to the understanding how process-oriented behavior can be promoted sustainably in organizations. Practical implications The results indicate that companies aiming for process orientation should apply role plays to achieve a change in behavior of employees. Originality/value This research contributes to the understanding of role plays as an effective learning method to adopt process-oriented behavior.
Article
This study aims to examine an integrated research model of employee empowerment from the perspectives of managers (the empowering) and employees (the empowered) with a newly proposed construct, empowerment disparity that captures a difference in employees' perception of empowerment within a team. A multilevel analysis was conducted using Hierarchical Linear Modeling (HLM) to test the hypotheses using a matched sample of 286 restaurant employees along with 51 managers and 2129 customers from five tourist cities in Thailand. The findings show that psychological empowerment and the psychological contract have a positive effect on customers' assessment of interaction quality, and empowerment disparity moderates the links between a manager's empowering behavior and psychological empowerment, and psychological empowerment and the psychological contract. The theoretical and managerial implications suggested by the findings are provided for researchers and practitioners.
Chapter
In der aktuellen Führungsforschung erfährt vor allem geteilte Führung eine besonders starke Beachtung. Unterstützt durch den Konkurrenz- und Innovationsdruck auf Unternehmen sowie anhaltende Unsicherheit auf den Märkten, hat die Idee, dass Führung nicht mehr den einzelnen Individuen übertragen werden kann, sondern jeweils auf mehrere Organisationsmitglieder aufzuteilen ist, eine große Popularität erlangt. Die aktuellen theoretischen Ansätze hierzu reichen von denen der partizipativen Führung bei Entscheidungen, über geteilte Führungskompetenzen innerhalb eines Teams bis hin zu Konzepten der kollektiven Führung, die Mitarbeiterführung grundsätzlich als ein pluralistisches, kollektives Phänomen auffassen, sowie den Ansätzen zur demokratischen Führung, deren Ziel darin besteht, Organisationen zu demokratisieren und hierarchische Strukturen aufzubrechen.
Article
Despite increasing attention on the topic of empowerment, our under-standing of the construct and its underlying processes remains limited. This article addresses these shortcomings by providing an analytical treatment of the construct and by integrating the diverse approaches to empowerment found in both the management and psychology literatures. In addition, the authors identify certain antecedent conditions of powerlessness and practices that have been hypothesized to empower subordinates.
Article
This article presents a cognitive model of empowerment. Here, empowerment is defined as increased intrinsic task motivation, and our subsequent model identifies four cognitions (task assessments) as the basis for worker empowerment: sense of impact, competence, meaningfulness, and choice. Adopting an interpretive perspective, we have used the model also to describe cognitive processes through which workers reach these conclusions. Central to the processes we describe are workers' interpretive styles and global beliefs. Both preliminary evidence for the model and general implications for research are discussed.