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Role of Employee Empowerment in Organization Performance: A review

Esam M.A. Mustafa


esam.badi@gmail.com
Abdul Talib Bon
talibon@gmail.com
Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia (UTHM),
86400 Parit Raja, Batu Pahat, Johor, Malaysia
Abstract
Purpose of this paper is to review the recent literature on the role of employee empowerment, as
TQM practices, on organizations performance and function. A total of 8 recent and most related papers
were reviewed. The review revealed that empowerment has a positive and multi dimension role in
organizations function and outcomes. Some observations and shortcomings have been identified and
discussed.
Keywords: Employee empowerment, TQM, review
Introduction
Employee empowerment is a key TQM practice that managers count on to increase the success
of TQM implementation. That is because TQM emphasizes on the culture of involving all employees in
the process and contributing to the work performance development (Lawler, 1992). Employee
empowerment has been linked with the prominence of firms quality culture (Howard & Foster, 1999).
Thus, from managerial cognizance perspective, empowering employee leads to achieve the best of
TQM implementation. Utilizing and revealing the empowerment practices within the management
process in organization provokes and necessitates the concept of total employee empowerment (Vouzas
& Psychogios, 2007). Vouzas and Psychogios argue that the concept of total employee empowerment
has a remarkable contribution to the managers understanding and awareness of TQM. Furthermore,
their finding indicated that empowerment culture within the paradigm of TQM practices in enhances the
outcomes of the TQM system.
The importance of employee empowerment is also can be delineated from the role of the soft
side of TQM on firms competitive advantage. The soft side of TQM is related to the human resource
management practices. In other words, the soft side of TQM is the practices that connected to concepts,
process and practices of people management such as employee empowerment and leadership
(Fotopoulos & Psomas, 2009). Employee empower as a soft TQM practices found to be has a
significant positive impact on organization performance (Brah, Tee, & Rao, 2002; Samat, Ramayah, &
Saad, 2006), on customer satisfaction and job satisfaction (Ugboro & Obeng, 2000), on creating and
strengthening the competitive advantage(Powell, 1995), on gathering, measuring and analyzing
information and data effectively in order to enhance the work process and support continues
improvement (Kaynak, 2003).
Definition of empowerment
There are two main dimensions in defining empowerment: psychological dimension and
structural dimension. Psychological empowerment dimension definitions fall into intrinsic motivation
that creates discretion and self-efficiency (Patah et al., 2009). Instances for the psychological
approaches definitions, Conger and Kanungo (1988) define empowerment as a procedure of improving
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self-efficiency perception among the employees. Thomas and Velthouse, (1990) described the
empowered employee as feeling of performing with high endeavors and achievement that derived from
level of instinct motivation, obligation, dedication and commitment. Brymer (1991) defines
empowerment as a process of decentralizing decision making in an organization, whereby managers
give more discretion and autonomy to the employees.
The definitions that focused on structural dimension, on the other hand, explain empowerment
as management action from perspective of organizations policies and structure. Kanter (1993) is the
first who argued about the structural dimension of empowerment. He claimed that empowerment is a
state in the organization that influence employees work related behavior. According to his definition,
Kanter presented four structural factors influence empowerment in organization: (i) involving
empowerment activities in job description (ii) information accessibility should be easy for the
employees (iii) supporting employee job responsibility (d) availability and accessibility of needed
resources to perform a job.
Literature Review
Samat, Ramayah and Saad (2006) explored the relationship between employee empowerment
and service quality as well as the relationship between employee empowerment and market orientation.
The authors concluded that employee empowerment has significant effect on service quality and market
orientation comparing with other practices of TQM examined in the study. Their results obtained from
an analysis applied on data collected from service organizations. The service organizations were from
different service business activities such as banking, education, private and public utility service and
consulting service. All those organizations practiced TQM in their operations and located in northern
Malaysian states (Perak, Kedah, Penang and Perlis).
Vousaz and Psychogios (2007) conducted a study aimed to evaluate managers awareness and
understanding of TQM concept. Their analysis results pointed employee empowerment as one of the
important soft TQM principles that assess managers understanding of TQM concepts. This study
focused on the whole concepts of soft aspects of TQM (the aspects of TQM that related to people
management concepts and principles). With respect to this, Vousaz and Psychogios investigated and
analyzed employee empowerment as a concept not as a practice or factor. They developed this concept
to be involves all principles and practices of total employee empowerment and involvement.
Boon, Arumugam, Safa, and Bakar (2007) argue that employee empowerment is the most
important TQM practices that significantly influences job involvement. According to their analysis
results, empowerment is the most crucial practice that increases level of job involvement which raises
the level of performance. This study investigated empowerment not just as a TQM practice but also as a
human resource management HRM practice. In other words, Boon et als study investigated
empowerment from three perspectives (i) empowerment as TQM practices, (ii) empowerment as HRM
practices, and (iii) empowerment from perspective of the relationship between HRM and TQM
practices. Thus, and with regard to the important role of HRM and TQM systems in the whole
management system, it can be said empowerment is a crucial practice that influence the overall
organization performance.
Jung and Hong (2008) conducted a study to explore the link between organization performance,
TQM practices and organization citizenship behavior. Their analysis findings showed that employee
empowerment plays a significant role on organization performance. The investigation in this study
addressed the empowerment as a soft TQM practice which showed to be have more effective role than
hard TQM practices. In light of this, Jung and Hong argue that the soft TQM, including empowerment,
has impact on both soft and hard performances while the hard TQM doesnt.

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The same critical role of employee empowerment appears in job satisfaction and innovation
performance in small and medium sized enterprises SMEs. Trivellas and Santouridis (2009) analyzed a
data collected from SMEs and the results showed that employee empowerment has a significant
contribution in creating employees job satisfaction as well as in increasing the degree of innovation
performance. The study investigated both soft and hard TQM practices and the main findings claimed
that only the soft TQM has impact on innovation performance.
Like Trivellas and Santouridis Singh (2011) also conducted a study in the field of SMEs in order
to find out how factors interact to success TQM implementation. In other words, Singhs study aimed to
identify the critical success factor in TQM implementation in SMEs. Through applying interpretive
structural modelling (ISM) technique, he found that employee empowerment is the one of four major
factors that are critical to success the implementation of TQM in SMEs. He observed and identified the
initial factors group through reviewing the related literature.
Jung, Wang, & Wu (2009) examined the relationship between TQM and continuous
improvement. One of their finding indicated the important mediation role of TQM practice, including
empowerment, between competitive strategy and continuous improvement in the international project
management. But the important finding is that empowerment has a significant positive impact on
continuous improvement which has direct influence on strengthening competitive advantage. Jung et
als study involved managers working in different four countries and multi nationality backgrounds.
Ueno (2010) reported that employee empowerment has a significant role in achieving and
enhancing service quality. He investigated TQM practices from perspective of service quality. His
investigation conducted through reviewing the literature that related to the TQM implementation and its
impact on service quality. One of the implications from Uenos review study is that not just employee
empowerment but all soft TQM practices have more impact on service quality than hard TQM
practices. This implication supports the assertion that in most of cases soft TQM is responsible for the
success of the whole TQM system. Staying with the review papers, Singh (2011) reviewed the literature
on TQM practices and implementation. He came out with a total of 11 influenced TQM factors and
concluded that empowerment is one of the most four important and critical factors that effect TQM
implementation and process. He interpreted the findings in the existing literature into set of TQM
factors listed according to its degree of effectiveness on the TQM implementation and results.
Table 1: Summary of the studies on employee empowerment
Study
Samat, et
al.(2006)
Vousaz and
Psychogios
(2007)
Boon et al.
(2007)

Jung and Hong


(2008)
Trivellas and

Source of data

Analysis
technique
101 service organizations in Correlation
Malaysia
382 managers from 43
service organizations in
Greece
377 employee s working in
semiconductor contract
manufacturing
organizations in Malaysia
230 maquiladora companies
in boarder of Texas and
Mexico
90 ISO 9001 certified

Exploratory
factor analysis
(EFA)
Regression

Structural
equation
modeling
Correlation

Findings
Employee empowerment has
significant effect on service quality
and market orientation.
employee empowerment assesses
managers awareness of TQM
Employee empowerment is the most
crucial TQM practices that
positively linked and effects the
level job involvement
Empowered employee plays
significant role on organization
performance.
Employee empowerment has a

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Santouridis
(2009)

manufacturing and service


firms in Greece

Jung, Wang, &


Wu (2009)

Structural
equation
modeling

Ueno, 2010

268 Managers of
international projects
working in US, Mexico,
Korea, and China.
Literature review

Singh (2011)

Literature review

Interpretive
structural
modeling (ISM)

Review

direct positive impact on job


satisfaction and innovation
performance in SMEs
Empowered employee has
significant impact on continuous
improvement in international project
management
Employee empowerment has
significant role in achieving and
enhancing service quality.
Employee empowerment is one of
four important factors that have
critical role in success of TQM
implementation.

Discussion and conclusion


Based on the literature review, there are many observations and shortcomings can be noted: first,
all the results support the positive role of empowerment in organization performance and outcomes.
This substantiates the crucial function of employee empowerment in the context of TQM system as well
as the HRM systems. Furthermore, the positive impact of empowerment on organization operation
implies the domination of soft side of TQM in the success of the implementation of TQM system which
asserted by (Ahire, Golhar, & Waller, 1996; Dow, Samson, & Ford, 1999; Powell, 1995).
Second, the literature revealed how the role of empowerment is diversified. For instance, and as
in Trivellas and Santouridis study, empowerment has a direct positive role on job satisfaction which
implies the indirect role of empowerment on innovation performance. Concurrently, it has a direct
positive influence on innovation performance without the mediation role of job satisfaction. The
diversified positive role of empowerment also appears in its influence on other TQM practices. For
instance, empowerment has positive impact on continuous improvement (Jung, et al., 2009); and on
employee involvement (Boon, et al., 2007).
Third, the focus of investigation is more likely to be on manufacturing industry organizations.
Excluding Samat et als study, all reviewed studies conducted in manufacturing or in both
manufacturing and service industries. According to Organization for Economic Co-operation and
Development OECD (2008), service industry serves more than %50 of global economics activities. In
some countries service sector shares more than 70 percent of GDP (e.g. Luxembourg 82%, Greece 78%,
and USA 77%). Therefore, studying empowerment as well as the other TQM practices in service
organizations need be given more consideration from researchers, scholars and academicians.
Purpose of this paper was to review the influence of employee empowerment, from perspective
of TQM practices framework, on organizations function and performance. The review involved 8
recent papers covering the period time from 2006 to 2011. The general view of employee empowerment
is showed to be having a positive role on whole organizations performance and functions. The review
also showed that empowerment has a diversified role on organizations function and on the other TQM
practices.
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