Organisations today work in an interconnected and competitive world; to be successful, they must be adaptive to the changes occurring in the world. They cannot compete on technological efficiency alone as it may erode over time, and so they should focus on their human resources—their most critical asset. By unleashing the creative and innovative energies of employees through empowerment, organisations can increase their effectiveness. Thus, empowerment as a management strategy has been peddled by its practitioners and researchers as one of the ways for organizations to meet the challenges of the current business environment.
Empowerment has been accepted as an important organisational factor in satisfying the psychological needs of employees in the workplace and thereby improving organisational and personal effectiveness to achieve organisational goals. Managers and scholars have identified that the true sustainable competitive advantage of any organization is its employees and that employees should be actively involved in the activities of the organization for its success (e.g., Lawler 1992, 1996). This idea is closely associated with the concept of empowerment, which means giving employees the autonomy to make decisions about how they go about their daily activities (Ford and Fottler 1995). The success of an organisation, be it a manufacturing organisation or a service organization , largely depends on its empowered workforce.
At first, the construct of empowerment tends to revolve around the issues of power and control. Researchers have given varying definitions of empowerment: authority in making everyday decisions, authority over work processes, command over performance goals and measurements, to name a few examples (Sternberg 1992; Pfeffer 1994; Beer 1991). Empowerment is seen as a critical variable that enables organizations to be more competitive and provides the potential to bring significant improvement in companywide performance through new structures and forms (Mills and Ungson 2003).
Employee empowerment is a strategy to enhance organizational performance and develop a flexible organization capable of adapting to a changing external environment. Empowered employees view themselves as more effective in their work and they are evaluated as more effective by their co-workers (Quinn and Spreitzer 1997). Empowerment enables them to adopt performance-enhancing behavior and contribute to the development of the organization’s competitive strength and success. Empowerment has been linked to improvements in the organizational systems and processes (Blanchard et al. 1996, 1999). Empowerment programs have been introduced in a number of organizations in order to improve productivity, increase customer satisfaction and enhance competitive advantage (Hardy and Leiba-O’Sullivan 1998).
Various empirical studies including that of Liden et al. (2000), Sparrowe (1994), Spreitzer (1995) and Spreitzer et al. (1997) support the relationship between employee empowerment and various work-related outcomes. Empowering employees may be one of the strategies that enable organizations to balance employees’ performance and job satisfaction . Empowerment and job satisfaction are important issues and emphasized as ways to reduce employee turnover, improve workplace environments and help organizations function effectively in the hospitality industry (Erstad 1997). In their study, Kouzes and Posner (1987) emphasize the positive relationship between empowerment and organizational effectiveness, as indicated by higher profits, growth and expense control. It also affects employee satisfaction, loyalty and service delivery of employees, especially in the service sector (Fulford and Enz 1995).
However, empowerment programs have failed to obtain the expected results because the psychological composition of the people who are being empowered had not been taken into consideration. Researchers, such as Spreitzer (1995), Thomas and Velthouse (1990) have focused more on complex cognitive psychological states that focus on what employees believe and feel rather than specific management practices like empowering structures, policies, and practices that are intended to empower employees. These results are due to employees being more influenced by their perceptions rather than by an objective reality (Bandura 1997). Menon (2001) also suggests that a focus on psychological empowerment is preferable as the benefits of empowerment can be attained only if the employees actually experience empowerment, i.e., the psychological state of empowerment.
Psychological empowerment has been positively correlated with managerial effectiveness, increased levels of job satisfaction and decreased level of job strain (Spreitzer et al. 1997). Nykodym et al. (1994) note that role conflict and ambiguity of employees who consider themselves empowered are reduced as they can control their own environment. Seibert et al. (2004) have shown that psychological empowerment had a mediating role in individual-level outcomes of performance and job satisfaction . Further literature in psychological empowerment reveals that organizations where employees are psychologically empowered show increases in productivity (Akbar et al. 2010), higher job satisfaction (Carless 2004; Patah et al. 2009; Fuller et al. 1999), high organizational commitment (Chen and Chen 2008; Joo and Shim 2010; Bhatnagar 2005), lower burnout (Çavus and Demir 2010), reduced employee turnover intent (Collins 2007) and reduced strain (Martin 2007).
The above studies show the importance and concern of practitioners and researchers in empowerment—especially psychological empowerment —and the need to develop conceptual and theoretical knowledge contributing to the empowerment of employees and the expected outcome from employees who are empowered.
1.1 Statement of Problem
Today’s economy is becoming more service-oriented, so much so that many claim we live in a service society...