Empowerment is the shift from a control approach to facilitate the employee and the team - which allows its employee freedom to act and innovate. The Employee then becomes an active and willing participant in the organization. A few people in the know discuss this issue in more detail....

The Panelists:

Manoj Sethu,  Director & Operations Head, 3MRT Software India Pvt Ltd

Dr. Satyajit Majumdar,  Professor, T A Pai Management Institute, Manipal 

Balaji Pasumarthy, Chief Catalyst, Golden Square and Businessgyan

Phanindra Sama, Founder - Redbus

Excerpts from the Q and A session :

Q: Will empowerment reduce employee turnover?

Manoj Sethu:  You work in a company because you feel good and you feel valued there. An empowered company provides this environment. When you are satisfied at that level, I don't think, you'll look for anything more and you'll be very happy to continue.  That's why retention is high.

Q: What is the size of your company today in terms of People and do you see challenges as you scale, to sustain the same culture?

Manoj Sethu: We have a team of 17. There would be challenges yes, but the most important thing is that, a new employee gets into the environment and adapts to the culture. It would be more of a challenge when they leave and join a new organization.

Balaji: If the number of people joining is a lot more than the employees already existing there, the habits and culture take time to seep in.

Phanindra: Scale does not matter; even a thousand Employee Company can be empowered. Empowerment does not mean the absence of rules and policies; as the company grows, policies for salary, TA etc. can be introduced.

Q: Will an open organisation structure work if the team size is small?

Balaji: Empowerment works immaterial of the size of the organisation. Semco has 7 different profit lines running into billion dollars, working across continents. Most often growth of a Business is due to the Business model, it has very less to do with the culture.

Prof. Majumdar: A growing organization can also practice empowerment, if the growth happens at the right pace and right grooming is provided.

Q: How do you know what is going on in the organization, especially profits?

Balaji: I'm a business man and I care about profits, we have strong MIS systems in our company. We get P & L account or the Value added report for every level in the business centre and for every magazine of Business Gyan, So each one of us gets to know whether we are making profits. Even the person in charge of the pantry gets a value added report.

Q: How do employees decide their own salary?

Balaji: To decide the salary of a person, We primarily need 3 bits of information, what the market value of the person is, what he has contributed and whether the company can afford him. The transparency in the company provides them the information and he can decide his own salary.

Q: Balaji, your employees are internally motivated. Why do you say external motivation is not good?

Balaji: I will give you an example, a group of students were asked to solve puzzles in a given time frame; their success rate was around 19 out of 20. Next there was a reward for the performance of solving puzzles, and their productivity increased. The third time, the reward was removed and the students didn't perform as well as the first time. The moment an external incentive is defined, the fluidity is lost, and if for some reason this external motivation is removed then people feel disillusioned.

Manoj Sethu: It's a wrong trend started by HR to give materialistic gifts to retain people, sometimes as ridiculous as Employees welcomed by Elephants. Now employee expectations go up; every time looking for more - never fully satisfied.

Prof Majumdar: Motivation is required; the debate is about what is the right motivator.

Q: Does empowerment work for industries which are confidentiality and systems driven?

Phanindra: Confidentiality and control are two different things, if we attach process control and confidentiality to empowerment, then we are not empowering an employee to think. The moment you impose control, you are not giving him trust, transparency and respect. 

Balaji: One of the things which make delegation possible is strong processes, but policies are more to do with actual work related issues, like no. of days leave, what time to come to work etc. Business processes need to be strong and people processes can be very fluid.

Prof Majumdar: In every business there is some amount of confidentiality, for example in an engineering industry, drawings may be very sensitive documents. Who should control and why is the debatable issue here. Information should be available on need basis. This issue should be addressed from process and practice rather than from a control prospective. I am a consultant for a large printing press in Manipal which prints question papers for universities. It's a very vulnerable business but there has never been a question paper leakage from their press. Their processes are very stringent, though there are many people who know about the source and the point of delivery.

These were excerpts from a Panel Discussion organised by Businessgyan and TASMAC on the topic ‘'Empowerment".

Compiled by Ms. Mangal D Karnad for Businessgyan

Issue BG89 Aug 08

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