THE ULTIMATE STARTER GUIDE TO EMPLOYEE EMPOWERMENT

INtroduction to employee empowerment

Employee empowerment may be the most underutilized tool in all of customer service. Too many organizations have a gap between the autonomy and authority they grant their frontline teams and the amount that they realistically could grant.

Often, that gap is quite large.

Yet, the difficulty individuals and organizations have empowering employees is understandable. It is the nature of individuals to be risk averse, and it is the nature of organizations to create rules to prevent problems from recurring. Both of these dynamics combine to restrict employees and the actions they are allowed to take to make a positive impact on the customer experience.

It is the natural gravitational pull of every organization to move towards more control and less flexibility. That pull is constantly working in diametric opposition to empowerment and can only be countered through conscious, proactive action and leadership.

Empowerment rarely occurs naturally and almost always requires some sort of institutional backing and concentrated initiative. Only once a culture of empowerment is firmly established can empowerment grow naturally and even then it must be nurtured and monitored, because even in the most empowered organizations the tendency to create more controls is strong.

Empowering employees in a smart, effective way takes focus and requires a measured, considered approach. In this guide, we are going to take a look at why employee empowerment is important and how you can make it work for your organization. We will cover the following topics:

  • Chapter 1: What Is Employee Empowerment
  • Chapter 2: Why You Should Empower Your Employees
  • Chapter 3: Smart Empowerment for the Real World
  • Chapter 4: Types of Employee Empowerment and Their Risks
  • Chapter 5: 9 Tips for Empowering Employees
  • Chapter 6: Next Steps

So, let’s get started with Chapter 1: What Is Employee Empowerment.


CHAPTER 1: WHAT IS EMPLOYEE EMPOWERMENT?

Employee empowerment had been defined as follows:

“A management practice of sharing information, rewards, and power with employees so that they can take initiative and make decisions to solve problems and improve service and performance. Empowerment is based on the idea that giving employees skills, resources, authority, opportunity, motivation, as well holding them responsible and accountable for outcomes of their actions, will contribute to their competence and satisfaction.” Citation

It is important to note that the dictionary definition above does not take into account a key distinction between two types of empowerment: actual empowerment, that granted by the organization to an employee, and psychological empowerment, the feeling of empowerment that an employee has. Academics studying the subject generally approach the two types of empowerment as separate and distinct phenomena.

For the purposes of this guide, you should simply note that there is a difference between actual and psychological empowerment and understand that even when you grant employees more power and authority, they still might not feel empowered. And when employees don’t feel empowered, they are unlikely to act empowered.

Without psychological empowerment, actual empowerment is of limited value.


CHAPTER 2: WHY EMPLOYEE EMPOWERMENT MATTERS

A good amount of research into employee empowerment has been conducted in the past few decades. This research has produced a variety of findings, and one theme that seems to be fairly universal is that empowerment is a win-win-win for employee, customer and organization, generally resulting in higher job satisfaction and better customer experiences.

Here are three quick examples of how employee empowerment can yield positive results for your organization:

EMPOWERED EMPLOYEES WILL IMPROVE THE ORGANIZATION

According to a study by Gopesh Anand and Dilip Chhajed, professors of business administration at the University of Illinois, frontline employees who perceive a high degree of autonomy in their jobs and trust their leaders will commit to improving their organization.

EMPOWERING EMPLOYEES HELPS CUSTOMERS STICK

According to the book 12: The Elements of Great Managing by Rodd Wagner and James K. Harter, a study by the Gallup Organization found “that organizations that empower employees experience 50% higher customer loyalty.”

AUTONOMY MAKES FOR HAPPIER TEAMS

A study performed by the Center for Effective Philanthropy (CEP) surveyed 1,168 employees from 31 different foundations and found that “foundation staff members are most satisfied in their jobs when they feel empowered in their day-to-day experiences at work” and that empowerment was “key to staff satisfaction.”


CHAPTER 3: SMART EMPOWERMENT FOR THE REAL WORLD

When I speak with business leaders, I like to talk about the concept of “Smart Empowerment.”

All too often, empowerment is spoken about in lofty, abstract terms. Empower your employees, and they will make the right decisions. It is presented as a magical idea — a panacea that cures all service ills.

However, empowerment is not about feel-good platitudes; empowerment is a decision about risk and reward.

This is why I believe in Smart Empowerment.

Smart Empowerment: Empowerment that strategically allows employees to impact the customer experience positively through real-time decision making and authority while limiting the amount of financial, legal, and operational risks the firm is exposed to.

Actual empowerment is contextual, and its limits should reflect the balancing of the expected rewards with the potential risks.

For instance, should all entry-level cashiers at a grocery store have the ability to comp any purchase up to $25.00? Maybe. Should all entry-level cashiers have the ability to make wire transfers from the company’s main account? Definitely not.

Obviously, this is an extreme example used to make a conceptual point: employee empowerment always has limits; it’s just a question of what they are.

The second aspect of smart empowerment is operability and scalability, meaning that the empowerment granted works well within the framework of current operational processes and is scalable across similar job functions throughout the organization. Organizations must ensure that employees can succeed with the authority and responsibility they have been granted by making sure that it works on the front lines in an effective and easy-to-implement fashion.


CHAPTER 4: EMPLOYEE EMPOWERMENT AND ITS RISKS

While empowerment should be implemented with heart and enthusiasm, it should be analyzed dispassionately, which is why we created this handy brainstorming tool for looking at empowerment in your organization.

The Empowerment Wheel below breaks down some of the most common categories of actual employee empowerment. Each piece of the wheel is color coded to indicate the potential riskiness of empowerment by category.

The Employee Empowerment Wheel

It is important to note that these risks are extremely broad and will vary greatly by industry and company. The risks are also highly relative; something that is labeled an intermediate risk could be much less risky than something which falls under a low risk category.

For instance, an employee who is empowered to create customer-facing signage for your store (minor operational matters) and writes something inappropriate on it, can do a lot more damage than an employee allowed to sign contracts valued at under $1,000 a year (legal).

The categories are designed to represent a general way to view categorical risks across industries but must be adapted to you own industry, organization, and most importantly, the specific nature of the authority and powers being granted.


Employee Empowerment Wheel | Risks of Empowerment

Click Image for Full Size

The Empowerment Wheel is a brainstorming tool — a graphical tickler for you and your team to consider the various types of empowerment and the potential risks that come with them. It is meant to remind you that empowerment can have unintended consequences and to help you be more tactical and thoughtful in empowering employees.

In the end, each specific way you empower employees should be viewed through the lens of upside and downside, risk and reward.

So, now that you’ve got the idea of risk management firmly placed in your mind, let’s look at 9 tips that can help you in empowering your employees to create better customer experiences.


CHAPTER 5: 9 TIPS FOR EMPOWERING EMPLOYEES

In an article called The Empowerment Process: Integrating Theory and Practice in the 1988 Academy of Management Review (p. 474), researchers Conger and Kanungo defined empowerment as “a process of enhancing feelings of self-efficacy among organisational members through the identification of conditions that foster powerlessness and through their removal by both formal organisational practices and informal techniques of providing efficacy information.”

In layman’s terms, empowerment is finding what makes your team feel powerless and removing those barriers. As such, the first step in evaluating how empowerment can have an impact on your customer experience is to ask one simple question:

Where in our customer’s journey could a more empowered employee enhance the customer’s experience and provide more effective customer service?

One you’ve identified the most common touch points where customers are encountering resistance, then simply evaluate what authority team members could use to improve these moments.

As you work through the process of finding these improvements, keep in mind the 9 tips below.

1. Loosen the Reins Overall

2. Broaden and Deepen Responsibilities

3. Demonstrate that You Trust Your Team

4. Provide an Allowance for Solving Customer Issues

5. Allow for Creativity in Creating Customer Experiences

6. Monitor Your Empowerment and Systems

7. Share Customer Feedback

8. Collaborate on Decision-Making

9. Focus on Being Customer-Centric


CHAPTER 6: NEXT STEPS

Employee empowerment is an effective and powerful tool for creating more rewarding experiences for your employees and customers alike. Done smartly, with an eye towards risk management and customer-centricity, empowerment can give employees the tools and authority they need to make customer experiences more successful and operations more profitable.

By its nature, empowerment starts at the top. Empowerment must first be granted by those who have the power to do so but then it must be embraced by those who have been given greater authority.  It must come from a leadership team dedicated to giving up control in exchange for the benefits that come from an empowered team.

Once leadership has committed to empowerment, for an empowerment initiative to be effective, there must be buy-in throughout the organization, buy-in that will come from collaboration and shared objectives.

Leadership must help bridge the gap between actual and psychological empowerment. Don’t just give your team the power, make sure they truly feel empowered. If you can create a team that is both empowered smartly and which is ready to use their empowerment to improve customer experiences, you, your employees, and your customers will all find that empowerment works wonders for transforming an organization from average to Hero-Class®.