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IMPACT OF EMPLOYEES’ EMPOWERMENT ON ORGANIZATION PERFORMANCE

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY        

Empowerment of people is a major contributor to the development of subordinates by allowing them to do extremely well by investing in themselves, even at the risk of making mistakes (Page and Wong, 2000). Servant leadership theory emphasizes empowering employees, serving them and being committed to cultivating them (Spear, 2004). Empowering others to act, will lead followers to do a better job, and will aware them about their full potential (Kouzes and Posner, 2002).

Successful leaders and managers help the employees feel competent. Moreover, they usually consider the interests of others (Kouzes and Posner, 2002). Goodly (2008) considered developing and empowering others as the main leadership development factors. In addition, he believed that servant leaders mostly can improve the leadership development factors. Developing others is one of the social skills of leaders (McCauley and Van

Velsor, 2004). In the past decade, many organizations have implemented managerial approaches based on empowerment (e.g. self-managed work teams, total quality management), on the expectation that these will increase employee productivity as well as innovation (Wellins et al., 1991).

To empower means to give power to. Power, however, has several meanings. In a legal sense, power means authority, so that empowerment can mean authorization (Kenneth W. Thomas

1990). However, power also means energy. Thus, to empower also means to energize. This latter meaning best captures the present motivational usage of the term. The word empowerment refers to the motivational content of this new paradigm of management. As leadership expert Daniel Goleman points out “the Employee is a basic molecule of distributed leadership and basic unit in which you can change norms throughout the organization.” In the past, the organizational researchers have focused their work on empowering management practice, including delegation of decision making from higher organizational levels to lower levels and increasing access to information and resources for individuals at lower levels (Blau and Alba 1986).

The concept of empowerment is defined through its different aspects in researches. According to Vogt and Murrel (1990), empowerment is the period of improving the decision making ability of the employees through cooperation, sharing, training, education and team work. Klagge moreover, identifies empowerment as the activity of assigning appropriate responsibility to employees and making them gain abilities (Klagge, 1998). It is understood from the definitions that not only the cognitive aspect of empowerment that consists the improvement of the capacity of the employee within the organization, but also behavioral aspects in which employee’s satisfaction from his or her job and workplace environment is crucial. Behavioral aspect of empowerment can be defined as the period of encouraging and autotomizing employees to improve their decision making skills and transfer the directive power and to benefit from their ability and experiences (Cacioppe, 1998). Behavioral aspect of empowerment means distribution of power from high levels to low levels. The cognitive aspect of empowerment can be defined as the improvement of employees’ opportunity to access organizational sources and information. Another aspect of empowerment is the psychological aspect. Through this aspect, the managers realize that the authority and the power are transferred, and makes sure empowerment applications are perceived. However, Conger and Kanungo (1988) accept empowerment as a motivational concept and define empowerment as the improvement of employees’ self-competence.

Organizational Performance is the level of how the activities serve the purpose (Akal, 1992). In other words, performance is "the rate of realization of the purpose" or "outcome level of the activity". This level shows how much the purpose or the objective is achieved (Schermerhorn et al., 1985). Institutionally, performance is defined differently according to different approaches. Performance is the level of reaching the target both for the institution and the individual. Some researchers like Campbell state that performance is not just the result of the activity, it is the activity itself. Campbell defines performance as behavior appropriate to the purpose of the organization which can be measured according to the contribution level (Suliman, 2001). Considering the definition, it is understood that performance depends on the personal traits, mental abilities and eagerness to be integrated with institutional purposes of each individual.

Organizational performance can be defined as “the degree to which companies achieved their business objectives” (Janepuengporn and Ussahawanitchakit, 2011). This construct is assessed essentially through financial indicators (such as profit, return on investment) or non- financial indicators (such as customer satisfaction and quality of products and services).Deshpande et al. (1993) and Drew (1997) developed pertinent measure of organizational performance that integrates both financial and non-financial indicators. It refers according to them “the degree of overall success, market share, growth rate, profitability and innovativeness in comparison with key competitors’. Therefore, this study focuses on the impact of employees’ empowerment on organization performance in Veepee industries. 

1.2           STATEMENT OF THE PROBLEM

Nowadays many firms like to concentrate on gaining a competitive advantage in the market. The advance equipment, new technology, good marketing strategy, excellent customer services and many other elements can be the factors to build up for the advantages. However, human resource is the most important assets of an enterprise and its success or failure depends on their qualifications and performance (Ongori, 2007). The employees are the repository of knowledge, skills and abilities that can’t be imitated by the competitors. Technologies, products and processes are easily imitated by the competitors; however, at the end of the day, employees are the most strategic resource of the company (Ongori, 2007).

Globalization has opened up various opportunities and challenges for Nigerian organizations to compete internationally. Besides technological advancement, a developed, competent and empowered workforce will give Nigerian organisations an edge over its competitors. Studies on empowerment have shown that it has a strong correlation to employee performance in terms of higher productivity, job satisfaction and reduction in staff turnover in organizations (Ongori, 2007). These problems necessitate the need to carry out a study on the impact of employees’ empowerment on organization performance in Veepee industries.

1.3           OBJECTIVES OF THE STUDY   

The general objective of this study is to examine the impact of employees’ empowerment on organization performance in Veepee industries. The specific objectives of this study include the following:

1.     To find out if there is practices of employee training among workers in Veepee industries.

2.     To ascertain the impact of employees’ empowerment on the job satisfaction of employees in Veepee industries.

3.     To assess the outcome of relevant training to employee on organizational performance.

4.     To determine if employees’ empowerment improves the capacity of employees in Veepee industries.

5.     To investigate the influence of employees’ empowerment on the productivity of Veepee industries.

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