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PR
39,5 Employee empowerment:
extent of adoption and
influential factors
574
Kevin Baird and Haiyin Wang
Macquarie University, Sydney, Australia
Received January 2008
Revised February 2008
Accepted July 2009
Abstract
Purpose – The purpose of the paper is to examine the extent of employee empowerment within
Australian manufacturing business units using an adapted version of the Pardo del Val and Lloyd
instrument. The paper also examines the influence of organizational (business unit size, training, and
link to rewards) and cultural (innovation, team work, and outcome orientation) factors on the extent of
adoption of employee empowerment.
Design/methodology/approach – Data was collected by survey questionnaire distributed to one
business unit within 250 manufacturing organizations.
Findings – The results reveal a moderate level of employee empowerment in Australian
organizations, with the cultural factor, teamwork, and the organizational factors, training and link
to rewards, found to have a significant impact on the overall level of adoption of employee
empowerment. In addition, specific cultural and organizational factors were found to be associated
with four different dimensions of employee empowerment (collaboration, formalization, directness,
and degree of influence), and the empowerment of employees at three different stages of the decision
making process.
Practical implications – The Pardo del Val and Lloyd measure provides a means by which
organizations can gain an improved insight into their current employee empowerment initiatives and
assess the critical preconditions that are most effective in enhancing employee empowerment
initiatives.
Originality/value – This study confirms the validity of a new measure of employee empowerment.
Furthermore, the study provides the first empirical analysis of the association between organizational
and cultural factors with the level of employee empowerment as assessed by this measure.
Keywords Employees, Empowerment, Organizational culture, Australia
Paper type Research paper

Introduction
Employee empowerment has widely been recognized as an essential contributor to
organizational success with many authors observing a direct relationship between the
level of employee empowerment and employee performance (Spreitzer, 1995; Kirkman
and Rosen, 1999), employee job satisfaction (Koberg et al., 1999; Ugboro and Obeng,
2000; Laschinger et al., 2001; Seibert et al., 2004), and employee commitment (Spreitzer,
1995; Ugboro and Obeng, 2000). Empowering employees enables organizations to be
more flexible and responsive (Mathieu et al., 2006) and can lead to improvements in
both individual and organizational performance (Conger and Kanungo, 1988; Dainty
Personnel Review et al., 2002; Ozaralli, 2003; Bordin et al., 2007). Similarly, it is maintained that employee
Vol. 39 No. 5, 2010
pp. 574-599 empowerment is critical to organizational innovativeness (Gomez and Rosen, 2001) and
q Emerald Group Publishing Limited effectiveness (Conger and Kanungo, 1988; Chiles and Zorn, 1995; Koberg et al., 1999;
0048-3486
DOI 10.1108/00483481011064154 Morrell and Wilkinson, 2002; Bartram and Casimir, 2007).
 Employee empowerment is more relevant in today’s competitive environment Employee
where knowledge workers are more prevalent (Wimalasiri and Kouzmin, 2000; Jarrar empowerment
and Zairi, 2002) and organizations are moving towards decentralized, organic type
organizational structures (Houghton and Yoho, 2005). There is extensive literature
advocating the benefits of employee involvement and participation (EIP) (Wimalasiri
and Kouzmin, 2000; Pun et al., 2001; Cox et al., 2006, 2007) with both EIP at a more
general level, and employee empowerment (whereby decision making authority is 575
delegated to lower level employees) playing an important role within high performance
work systems (HPWS) (Kling, 1995; Huselid, 2005; Cappelli and Neumark, 2001; Cox
et al., 2007; Takeuchi et al., 2009). It is increasingly important for organizations to
respond rapidly to changes in the environment and empowering employees represents
a logical way to achieve such objectives as it eliminates extensive communication up
and down the organizational hierarchy. Lower level employees receive timely
information about operations, have the relevant knowledge of their work area, and bear
the consequences of the decisions made. Empowerment of these employees also
provides management with more time to consider broader strategies and the long-term
objectives of the company.
Despite the claimed benefits associated with employee empowerment, there is
evidence which suggests that the implementation of empowerment practices is not as
prevalent as would be expected, with many employee empowerment initiatives unable
to achieve the levels of empowerment intended (Collins, 1994; Foster-Fishman and
Keys, 1997; Cunningham and Hyman, 1999). Indeed, Argyris (1998) maintains that
empowerment is superficial and that the empowerment of employees is just rhetoric
with managers still maintaining control.
Consequently, the first objective of this study is to examine the extent to which
employee empowerment practices are adopted within Australian business units.
Employee empowerment can be adopted at different levels. For instance, Rosenthal
et al. (1997, p. 11) claim that employee empowerment can range from “sham
empowerment” (a low level of empowerment adoption), to “high levels of devolution of
autonomy and responsibility” (high levels of empowerment adoption). Insufficient
attention has been given to the link between the theory advocating employee
empowerment and the practical implementation of employee empowerment (Conger
and Kanungo, 1988). This study intends to address the gap in the literature by
providing a more detailed analysis of the extent to which employee empowerment
exists within Australian manufacturing organizations.
The study measures employee empowerment using an adapted version of the Pardo
del Val and Lloyd (2003) instrument. The measure incorporates a multi-level measure
of employee empowerment, which assesses the extent of adoption in respect to four
dimensions of empowerment: collaboration, formalization, directness, and degree of
influence. Collaboration refers to the extent to which employees take part in the
decision making process. Formalization refers to whether there are “official channels”
to put empowerment into practice or “there are certain norms or rules to guarantee
employee participation” (Pardo del Val and Lloyd, 2003, p. 103). Empowerment is
direct when “employees can contribute directly in the decision making process, instead
of through intermediates” (Pardo del Val and Lloyd, 2003, p. 103). Finally, the degree of
influence refers to the extent of authority that employees have in making and
implementing decisions about tasks. The measure requires respondents to assess the
PR level of empowerment of employees in respect to each of these four dimensions at three
39,5 stages of decision-making: identifying problems; designing alternatives and the
ultimate decision; and the implementation and control stages.
Many authors maintain that empowerment of employees is dependent on the
provision of a supporting organizational environment with the literature identifying
specific contextual factors and strategies that promote and support empowerment
576 (Foster-Fishman and Keys, 1997; Ugboro and Obeng, 2000). For example, some of the
factors associated with the inability of organizations to implement empowerment
practices include a lack of top management support (Cunningham and Hyman, 1999),
employee perceptions that empowerment is linked to downsizing (Adler, 1993), and the
creation of inappropriate competition between teams (O’Conner, 1990; Swenson, 1997).
Given the importance of employee empowerment in enhancing organizational
success, it is critical to identify the specific factors that are associated with higher
levels of empowerment within organizations (Gomez and Rosen, 2001). Accordingly,
the second objective of the study will be to examine the association between specific
organizational (business unit size, training, and link to rewards) and cultural factors
(innovation, team work, outcome orientation) with the extent of adoption of employee
empowerment within organizations. While these organizational and cultural factors do
not represent an exhaustive list of factors associated with the adoption of employee
empowerment practices, they are chosen as examples of the factors that are expected to
support employee empowerment practices. The motivation for including training and
link to rewards comes from prior studies, which have associated these factors with
employee empowerment generally, while the third organizational factor business unit
size is included due to the conflicting arguments concerning its relationship with
employee empowerment (Spreitzer, 1996; Daft, 2001). The motivation for including
selected business unit cultural dimensions is that the literature has inferred their
relationship with employee empowerment (Foster-Fishman and Keys, 1997) while no
study to date has empirically examined this association.
The study will empirically examine the relationship between each of the
organizational and cultural factors with the level of empowerment using the adapted
Pardo del Val and Lloyd (2003) measure. Specifically, the study will examine the
association between each of these factors with both the overall level of employee
empowerment and each of the four dimensions of empowerment (collaboration,
formalization, directness, and degree of influence) in an attempt to provide a more
detailed assessment of how each of these factors can support empowerment practices.
Knowledge of such associations will be important to organizations wishing to create an
organizational environment conducive to employee empowerment.
Hence, the study has two main objectives, which are summarized in the following.
.
Objective 1: To provide a more detailed examination of the extent of adoption of
employee empowerment practices within Australian manufacturing business
units using the adapted Pardo del Val and Lloyd (2003) measure.
.
Objective 2: To examine organizational factors (business unit size, training, and
link to rewards) and business unit cultural dimensions (innovation, team work,
and outcome orientation) for their association with the extent of adoption of
employee empowerment in total and in respect to each of the dimensions of the
Pardo del Val and Lloyd (2003) measure.
Employee empowerment Employee
Employee empowerment refers to the delegation of power and responsibility from empowerment
higher levels in the organizational hierarchy to lower level employees, especially the
power to make decisions (Langbein, 2000; Dainty et al., 2002; Arneson and Ekberg,
2006). The extant literature refers to two main conceptions of empowerment: structural
and psychological (Mathieu et al., 2006). The majority of empirical studies on employee
empowerment have incorporated the psychological perspective (Spreitzer, 1995, 1996; 577
Lashley, 1999; Menon, 2001; Avolio et al., 2004; Bartram and Casimir, 2007; Bordin et al.,
2007; Chen et al., 2007), which focuses on individual employees’ feelings and
experiences of being empowered. Alternatively, few studies have focused on the
structural perspective (Arnold et al., 2000; Wall et al., 2002; Mills and Ungson, 2003),
which refers to the initiation of empowerment by top management, focusing on the
delegation of authority and responsibility down the hierarchy (Leach et al., 2003;
Mathieu et al., 2006).
This study will contribute to the dearth of studies evaluating employee
empowerment using the structural approach. The use of this approach will enable
employee empowerment to be assessed more objectively than the psychological
approach, which is reliant on self-reported perceptions, which may be influenced by
individual factors such as personality, family conditions, and social background. In
addition, it is anticipated that the incorporation of the four dimensions of the Pardo del
Val and Lloyd (2003) instrument will enable a more accurate assessment of the actual
level of empowerment within Australian business units by focusing on the actual
mechanisms by which authority/responsibility is provided to employees.

Factors affecting employee empowerment

In addition to determining the level of employee empowerment, a major objective of
this study is to explore the organizational context in which employee empowerment
practices are implemented. Employee empowerment is usually multi-dimensional
(Vogt and Murrell, 1990) with many factors facilitating its implementation.
Accordingly, the study will examine the association between organizational and
cultural factors with the extent of employee empowerment experienced in Australian
manufacturing business units.

Organizational factors
Three organizational factors were examined for their association with employee
empowerment: business unit size, training, and link to rewards. It is maintained that
larger organizations will be more likely to exhibit higher levels of employee
empowerment as they have a greater number of hierarchical levels, thereby providing
them with greater opportunity to delegate decision making to lower levels (Dimitriades
and Kufidu, 1995; Spreitzer, 1996). However, larger organizations tend to be more
bureaucratic which limits creativity and threatens personal liberties including making
decisions (Daft, 2001). Alternatively, smaller organizations have simpler structures and
are better equipped to disseminate the information required to facilitate employees’
participation in decision making (Peterson and Berger, 1971). Given these conflicting
arguments the hypothesis is stated in the null form.
H1. There is no relation between business unit size and the extent of employee
empowerment.
PR Training can assist employees in adapting to new management initiatives such as
39,5 employee empowerment. Specifically, training can assist by helping employees to
understand management initiatives, and by educating and preparing them with the
knowledge and skills they require (Cunningham and Hyman, 1999; Pun et al., 2001).
Mathieu et al. (2006) maintain that empowerment of employees will not achieve its
desired outcomes unless employees “have the skills and abilities needed to handle the
578 tasks and decisions at hand” (p. 100). Hence, the level of training is considered
important in respect to providing employees with the skills (team work, problem
solving, communication, and interpersonal) that facilitate employee empowerment
(Smith et al., 2004). Employees who receive such training will be more competent and
confident in making decisions. In addition, employees who are equipped with
decision-making skills are more likely to be trusted by management and thereby
delegated decision-making power (Rago, 1996; Dufficy, 1998; Klagge, 1998).
H2. The level of training is positively related to the extent of employee
empowerment.
Many studies have revealed the effect of a link to rewards on organizational
performance (Dowling and Richardson, 1997) and total quality management (Allen and
Kilmann, 2001). Similarly, it is maintained that if management wishes to implement
employee empowerment within an organization, adequate rewards must be linked to
the desired employee behavior. Specifically, an appropriate reward system must be put
in place to encourage employees to assume the additional decision-making
responsibilities associated with employee empowerment. Hence, management should
link empowerment behavior to rewards, be it financial benefits or promotion
opportunities, in order to encourage employee empowerment within their organization.
H3. Link to rewards is positively related to the extent of employee empowerment.

Cultural factors
Organizational culture refers to the shared system of meaning that guides members
believing, thinking, perceiving, and feeling, and ultimately directs their behavior
(Schein, 1985; O’Reilly and Chatman, 1996; Schein, 1996). Organizational culture has
been found to influence employee retention, employee performance, work commitment,
employees’ self-confidence, and ethical behavior (Deal and Kennedy, 1982; Holmes and
Marsden, 1996; Messmer, 1999). Organizational culture influences employee behavior
via employees’ perceptions and cognitive styles (Morris, 1992). It informs employees
about what an organization values, and thereby influences and encourages them to
behave in the desired way. Organizational culture provides an environment and
framework to determine when, where, and how to implement employee empowerment
(Foster-Fishman and Keys, 1997). Hence, it is important for management to foster an
organizational culture that is conducive to the implementation of employee
empowerment. This study examines the association between employee
empowerment and three dimensions of organizational culture: innovation, teamwork,
and outcome orientation. These dimensions are drawn from the O’Reilly et al. (1991)
organizational culture profile (OCP) measure.
Innovation represents a business unit’s receptivity and adaptability to change, and
its willingness to experiment (O’Reilly et al., 1991, p. 505). Innovative organizations, are
characterized by delegation, and participative leadership, and decision making
(Damanpour, 1991; Glynn, 1996; Axtell et al., 2000). Innovative cultures promote open Employee
minds and encourage employees to accept new ideas (Naveh and Erez, 2004) and hence, empowerment
employee empowerment is less likely to meet resistance in an innovative organization.
Business units with more innovative cultures will therefore be expected to adopt
employee empowerment to a greater extent than units with less innovative cultures.
Teamwork refers to the extent to which employees work in unison to achieve
organizational goals. Organizations with a more teamwork-oriented culture are more 579
likely to implement employee empowerment to a greater extent for a number of
reasons. The cohesiveness of teams facilitates the communication and information
sharing required for participation in the decision making process (Melhem, 2004).
Furthermore, given teams are frequently assigned independent tasks, they provide
opportunities for empowerment of decision making in respect to those tasks (Psoinos
and Smithson, 2002). Hence, business units with more team oriented cultures will be
expected to adopt employee empowerment to a greater extent than those business units
that emphasize team work to a lesser extent.
The third cultural dimension, outcome orientation, refers to the extent to which
business units “emphasize action and results, have high expectations for performance,
and are competitive” (O’Reilly et al., 1991, p. 505). Organizations with outcome oriented
cultures focus on the outcomes achieved, with less emphasis placed on the processes
used to achieve the goals. Employees are given greater independence and
decision-making autonomy in determining how they achieve their goals. Hence,
business units with more outcome-oriented cultures are more likely to adopt employee
empowerment to a greater extent than business units with less outcome oriented
cultures.
H4. Organizations, which value the innovation, team work, and outcome
orientation culture dimensions to a greater extent will adopt employee
empowerment to a greater extent.

Method
A survey questionnaire was mailed to the production manager of a sample of 250
Australian manufacturing organizations identified in the Kompass Australia (2005)
directory[1]. Production managers were chosen, as they are generally at a relatively
low level in the organizational hierarchy, and could therefore provide information
regarding the empowerment of front line workers[2]. Business units were chosen as the
unit of analysis because employee empowerment practices may differ across business
units within an organization. The questionnaires were distributed to one business unit
within each organization. The survey was administered using the Dillman (2000)
Tailored Design Method which provides guidance in respect to: the formatting and
style of questions, techniques to personalize the survey, and distribution of the
surveys. This approach has led to improved response rates to mail survey
questionnaires (Dillman, 2000).
In total, 93 responses were received for a response rate of 37.2 per cent. These
comprised 50 (20 per cent) responses to the initial distribution of the surveys and a
further 43 responses to the follow-up mailing. Non-response bias was assessed by
comparisons of independent and dependent values between early and late respondents.
No significant differences were detected in any of the comparisons. Variables were
measured as follows.
PR Extent of adoption of employee empowerment
39,5 The extent of adoption of employee empowerment was measured using a 12-item
measure based on the Pardo del Val and Lloyd (2003) instrument. The measure (see the
Appendix) incorporates four dimensions of employee empowerment: collaboration,
formalization, directness, and the degree of influence. Respondents were required to
indicate the level of empowerment of front line workers in respect to each of the four
580 dimensions of empowerment using separate seven point Likert scales with anchors of
“no collaboration at all” and “substantial collaboration”, “very informal” and “very
formal”, “very indirect” and “very direct”, and “no influence” and “the decision making
power is delegated to the worker”. Respondents were asked to indicate the level of
empowerment for each dimension in respect to three decision-making stages: the
identification of problems stage, the design of alternatives and ultimate decision stage,
and the implementation and control stage. Hence, the level of collaboration,
formalization, directness, and degree of influence were each scored as the sum of the
three items (ranging from 3 to 21) with higher scores representing greater
empowerment.
The total level of empowerment was assessed as the combined score across the 12
individual items (three stages of decision making for each of the four dimensions of
empowerment). Accordingly, the total score for the level of employee empowerment
ranged from 12 to 84 with higher scores representing greater levels of employee
empowerment. Principal component factor analysis was performed on the 12-item
measure of employee empowerment (see Table I) and confirmed the identification of
the four dimensions of employee empowerment, accounting for 79.27 per cent of the
total variance. The Cronbach (1951) alpha value for each of the four dimensions (see
Table II) and the overall measure of employee empowerment (0.85) exceeded the 0.70
threshold generally considered acceptable for internal scale reliability (Nunnally, 1978,
p. 245).

Business unit size

Business unit size was measured by the number of equivalent full-time employees in
each unit (as indicated by respondents), logarithmically transformed to improve the
normality of the distribution.

Questions as shown
in the Appendix Directness Formalization Degree of influence Collaboration

(a)(i) 0.374 0.108 0.000 0.768

(a)(ii) 0.125 0.096 0.241 0.841
(a)(iii) 0.064 0.299 0.237 0.733
(b)(i) 0.107 0.820 2 0.019 0.153
(b)(ii) 0.041 0.945 2 0.028 0.136
(b)(iii) 0.112 0.904 0.023 0.119
(c)(1) 0.892 0.080 0.115 0.145
Table I. (c)(ii) 0.856 0.050 0.164 0.212
Principal components (c)(iii) 0.835 0.171 0.296 0.132
factor analysis of the (d)(i) 0.398 0.032 0.709 0.113
12-item measure of (d)(ii) 0.128 20.054 0.871 0.162
employee empowerment (d)(iii) 0.113 0.002 0.912 0.165
 Employee
Minimum Maximum
Cronbach empowerment
Variable n Mean SD Actual Theoretical Actual Theoretical alpha value

Sizea 92 3.83 1.01 1.25 – 6.35 – –

Training 93 18.46 6.03 4 4 28 28 0.94
Link to rewards 93 11.35 3.79 3 3 19 21 0.87 581
Innovation 93 12.44 3.34 5 5 20 25 0.76
Team work 93 13.25 4.91 7 7 32 35 0.88
Outcome orientation 92 10.30 3.19 5 5 20 25 0.84
Collaboration 93 14.60 3.60 6 3 21 21 0.78
Formalization 93 11.54 4.27 3 3 20 21 0.88
Directness 92 14.21 4.03 6 3 21 21 0.89
Degree of influence 93 14.18 3.63 4 3 21 21 0.85
Total empowerment 92 54.53 10.78 24 12 79 84 0.85
Notes: aLog transformation of number of employees; lower scores indicate that the culture dimensions Table II.
were valued to a greater extent Descriptive statistics

Link to rewards
Link to rewards was measured using a three item self-developed measure. The three
questions (see the Appendix) were designed to evaluate the link between rewards and
three types of empowerment behavior: participation in the decision making process;
the ability to react to changes quickly; and independency in decision-making. Each of
the items were measured on a seven-point Likert scale, with anchors of “not at all” and
“to a great extent” used to indicate the link between rewards and employee
empowerment. Link to rewards was scored as the sum of the three items (ranging from
3 to 21) with higher scores representing a higher link to rewards. The Cronbach alpha
of 0.87 for this self-developed measure exceeded the 0.70 threshold generally
considered acceptable for internal scale reliability (Nunnally, 1978, p. 245).

Training
The measure of training was based on the Smith et al. (2004) instrument. Specifically,
respondents were required to indicate the level of training provided to employees in
relation to team work skills, communication skills, problem solving skills, and
interpersonal skills on a seven-point Likert scale with anchors of “not at all” and “to a
great extent”. The level of training was scored as the sum of the four items (ranging
from 4 to 28) with higher scores representing higher levels of training. The Cronbach
alpha of 0.94 for this measure exceeds the 0.70 threshold generally considered
acceptable for internal scale reliability (Nunnally, 1978, p. 245).

Organizational culture
Business unit culture was measured using the 26-item version of the Organizational
Culture Profile (O’Reilly et al., 1991). Respondents were required to indicate the extent
to which each of these items were valued in their organization on a five-point Likert
scale with anchors of 1 “valued to a very great extent” and 5 “not valued at all”.
Principal components factor analysis produced six cultural factors, accounting for 68.1
per cent of the total variance. The six factors (team work, innovation, outcome
PR orientation, attention to detail, stability, and aggressiveness) corresponded to previous
39,5 studies (Windsor and Ashkanasy, 1996; McKinnon et al., 2003; Baird et al., 2004),
although no respect for people dimension was found. Measures for the three focal
factors (teamwork, innovation, and outcome orientation) were subsequently obtained
as the sum of the scores for the relevant items, which loaded cleanly on each factor (see
the Appendix). The Cronbach alpha values for each of these measures (see Table II)
582 exceeded the 0.70 threshold generally considered acceptable for internal scale
reliability (Nunnally, 1978, p. 245).

Results
Extent of adoption of employee empowerment
The overall extent of adoption of employee empowerment practices was broken into
three categories. Business units with a total empowerment score of less than 48 were
classified as low adopters, those scoring between 49 and 66 as moderate adopters, and
those scoring 67 or above as having substantial empowerment[3]. While it is
acknowledged that these classifications are arbitrary they provide a means by which
the overall level of employee empowerment could be interpreted. In line with these
classifications it was found that 25 per cent of business units were experiencing
relatively low levels of employee empowerment, 63 per cent of business units were
experiencing moderate levels of empowerment, while only 12 per cent of business units
were experiencing substantial empowerment.
A detailed analysis of the level of empowerment in respect to each of the four
dimensions of employee empowerment, at each of the three stages of decision-making
was also undertaken. For each of these dimensions, the level of empowerment was
broken into four categories: little or no empowerment (scored as response point 1 on the
seven point Likert scale); low empowerment (response points 2 and 3); moderate
empowerment (response points 4 and 5); and substantial empowerment (response
points 6 and 7). Tables III to VI reveal the results of this analysis.
Table III reveals that collaboration between employees is more prevalent at the
“identification of problems” stage of decision making with 55.9 per cent of respondents
indicating that front line workers substantially collaborate at this stage. However, the
level of collaboration of front line workers at both the “design alternative” stage and
“implementation and control” stage is only moderate for the majority of workers.
Table IV shows that the level of formalization across the three decision making
stages is fairly similar with the majority of respondents indicating that there is a
moderate level of formalization within their business units (44.1 and 50.5 per cent of
respondents at the design alternatives and implementation and control stages
respectively). A relatively small percentage of respondents indicated that there was
substantial formalization of empowerment at each of the three stages of
decision-making.
Table V reveals that respondents generally indicated that front line workers
contributed less directly to the decision making process at the “design alternatives and
ultimate decision stage” and the “implementation and control” stages. Specifically,
only 29 (34.8 per cent) of respondents indicated substantial directness at the design
alternatives (implementation and control) stages compared to 46.2 per cent of
respondents at the identification of problems stage.
 No Low level of collaboration Moderate level of Substantial
collaboration (1) % (2-3) % collaboration (4-5) % collaboration (6-7) %

Identification of problems
stage 0 0 14 15.1 27 29.0 52 55.9
Design alternative 2 2.2 21 22.6 42 45.2 28 30.1
Implementation and
control 1 1.1 16 17.2 47 50.5 29 31.2
empowerment
Employee

decision making stage

The collaboration of
employees at each
Table III.
583
 PR
39,5

584

Table IV.
The formalization of
empowerment at each
decision making stage
Little Low level of Moderate level of Substantial
formalization (1) % formalization (2-3) % formalization (4-5) % formalization (6-7) %

Identification of problems
stage 7 7.5 35 7.6 30 32.3 21 22.6
Design alternative 6 6.5 32 34.4 41 44.1 14 15.1
Implementation and
control 7 7.5 27 29.0 47 50.5 12 12.9
 Little directness Low level of directness Moderate level of directness Substantial directness
(1) % (2-3) % (4-5) % (6-7) %

Identification of problems stage 1 1.1 18 19.4 31 33.3 43 46.2

Design alternative 0 0 25 27.2 40 43.0 27 29.0
Implementation and control 0 0 20 21.7 40 43.5 32 34.8
empowerment
Employee

decision making stage

The directness of
Table V.

empowerment at each
585
 PR
39,5

586

Table VI.

employees at each
decision making stage
The degree of influence of
Little influence Low level of influence Moderate level of influence Substantial influence
(1) % (2-3) % (4-5) % (6-7) %

Identification of problems stage 0 0 12 12.9 35 37.6 46 49.5

Design alternative 2 2.2 22 23.7 45 48.4 24 25.8
Implementation and control 1 1.1 18 19.4 49 52.7 25 26.9
Finally, Table VI reveals that 49.5 per cent of respondents indicated that front line Employee
workers have substantial power/authority to implement their decisions at the empowerment
“identification of problems” stage. However, only 25.8 and 26.9 per cent of the
respondents indicated the same level of substantial power/ authority at the “design
alternative and ultimate decision” stage and the “implementation and control” stages
respectively. The majority of the respondents reported that that their front line workers
had a moderate level of authority/power to make and implement decisions about tasks 587
at those two stages (48.4 and 52.7 per cent) respectively.

Factors affecting the extent of adoption of employee empowerment

The association between the organizational factors (business unit size, training, and
link to rewards) and business unit culture with the extent of adoption of employee
empowerment was initially assessed using hierarchical regression analysis[4], with the
results presented in Table VII. The model was significant (Fsig ¼ 0:000) with a total R2
of 0.301. The three cultural factors (innovation, team work, and outcome orientation)
were entered together in block 1. The amount of variation in the level of employee
empowerment explained by these cultural factors was 0:248 ðp ¼ 0:00Þ. The
organizational factors (size, training, and link to rewards) were entered together in
block 2. These factors explained an additional amount of variation of
0:053 ðp ¼ 0:108Þ.
Stepwise regression was subsequently used to identify the specific independent
variables that had the most significant effect on the level of employee empowerment
with the results appearing in Table VIII. One organizational factor (training) and one
cultural factor (team work) were found to be related to the overall level of adoption of
employee empowerment. Such results support hypothesis two and partially support
hypothesis four. These findings imply that the extent of adoption of employee
empowerment is higher in organizations with higher levels of training and in
organizations with more team oriented cultures.

Block no. Independent variable R2 change F change Sig

1 Organizational factors (size, training, link to

rewards) 0.248 9.450 0.000
2 Business unit culture (innovation, team work, Table VII.
outcome orientation) 0.053 2.087 0.108 Hierarchical regression
Total F 5.947 analysis of the extent of
(Fsig) 0.000 adoption of employee
R2 0.301 empowerment

Independent variable b coefficient t-statistics tsig

Training 0.393 2.172 0.033 Table VIII.

Team work 20.830 23.757 0.000 Stepwise regression
F 15.381 analysis of the extent of
(Fsig) 0.000 adoption of employee
R2 0.257 empowerment
PR Further analysis was also undertaken to evaluate the association between the
39,5 organizational and cultural factors with the level of empowerment at each of the three
stages of decision-making, and in respect to each of the four dimensions of empowerment.
Table IX reveals that the same two factors (training and team work) exhibited a
significant relationship with empowerment at the various stages of decision making. In
particular, it was found that the team work factor was associated with the level of
588 employee empowerment in respect to all three stages of decision making while the level
of training was associated with the empowerment of employees at the design of
alternatives and implementation and control stages.
Table X reveals that two organizational factors (training and link to rewards) and
all three cultural factors (innovation, team work, and outcome orientation) were
significantly related to the level of empowerment in respect to at least one of the four
dimensions of empowerment. These results support H2, H3 and H4. In addition, the
fact that organizational size was not related to the extent of employee empowerment
provides support for H1.
The level of training was found to be associated with the level of collaboration and
formalization dimensions of empowerment. Specifically, organizations that had
provided higher levels of training experienced higher levels of collaboration in decision
making and were more likely to have official channels or rules/procedures in place to
guarantee employees participation in the decision making process. The link to rewards
factor was associated with the directness of empowerment, with employees more likely
to contribute directly to the decision making process when they are rewarded for
empowerment behavior.
The association between the cultural dimensions of innovation and outcome
orientation and empowerment was found to exist in respect to the formalization
dimension of empowerment. Specifically, more formal channels to facilitate
participation in decision-making were found in less innovative and more outcome
oriented organizations. In addition, the teamwork cultural dimension was found to be
associated with the collaboration and degree of influence empowerment dimensions.
Hence, employees collaborate more and have greater decision-making authority in
more teamwork-oriented organizations.

Conclusions
Discussion
This study had two objectives, the first of which was to provide a more detailed
examination of the extent of employee empowerment in Australian manufacturing

Designing alternatives Implementation and

Identifying problems and ultimate decision control
Table IX. Independent variable b t-stat tsig b t-stat tsig B t-stat tsig
Stepwise regression
analysis of extent of Training 0.149 2.171 0.033) 0.157 2.335 0.022)
adoption of employee Team work 20.397 24.805 0.000 20.218 22.595 0.011 20.247 23.016 0.003
empowerment at the F 23.085 9.680 12.247
three stages of decision Fsig 0.000 0.000 0.000
making R2 0.202 0.179 0.216
 Collaboration Formalisation Directness Degree of influence
Independent variable b t-stat tsig b t-stat tsig b t-stat tsig b t-stat tsig

Training 0.150 2.492 0.015 0.280 3.848 0.000

Link to rewards 0.353 3.351 0.001
Innovation 0.401 2.775 0.007
Team work 20.254 2 3.441 0.001 20.283 2 3.949 0.000
Outcome orientation 20.419 22.848 0.005
F 15.441 9.106 11.232 15.595
(Fsig) 0.000 0.000 0.001 0.000
R2 0.255 0.237 0.111 0.146
empowerment

empowerment
dimensions of employee
Employee

adoption of the four

analysis of extent of
Stepwise regression
Table X.
589
PR business units using an adapted version of the Pardo del Val and Lloyd (2003) measure.
39,5 The data analysis confirmed the reliability of this measure and provides support for
the usefulness of this measure in providing a more detailed assessment of the extent to
which employee empowerment is implemented within organizations. Specifically, the
measure enables employee empowerment to be assessed in respect to the mechanisms
by which authority/responsibility for decision-making is delegated to employees by
590 encapsulating four dimensions of empowerment (collaboration, formalization,
directness, and degree of influence). The measure also enables employee
empowerment to be evaluated in respect to three different stages of decision making
(identifying problems, designing alternatives and the ultimate decision, and
implementation and control) thereby enabling an assessment of whether
empowerment is applied universally or with restrictions. The measure represents a
major contribution to the literature by providing practitioners with the opportunity to
gain an improved insight into their empowerment practices. The study also contributes
to the literature evaluating employee empowerment in respect to the structural
perspective.
The analysis revealed that the majority of business units had a moderate level of
employee empowerment (63 per cent), with only 12 per cent of organizations being
classified as having a high level of employee empowerment, and 25 per cent of
organizations experiencing low levels of employee empowerment. The fact that
Australian manufacturing organizations have not fully embraced employee
empowerment is surprising given the evidence demonstrating the strong association
between employee empowerment and employee (Kirkman and Rosen, 1999) and
organizational performance (Dainty et al., 2002; Ozaralli, 2003; Bordin et al., 2007).
These findings suggest that there is great potential for organizations to increase the
level of empowerment within their organization.
By encapsulating the mechanisms by which empowerment takes place the Pardo
del Val and Lloyd (2003) measure enabled an insight into assessing the manner in
which employee empowerment practices were implemented within organizations. For
instance, the analysis revealed that the empowerment of employees was primarily
occurring through collaboration with employees. Less emphasis was placed on
ensuring that employees contributed directly to decision making processes (directness)
and the extent to which employees were given responsibility to make and implement
decisions (degree of influence), while the introduction of official channels or certain
norms or rules to guarantee employee participation (formalization) was the mechanism
used the least to implement employee empowerment practices. These findings suggest
that in adopting employee empowerment organizations need to place greater emphasis
on ensuring that procedures are in place to guarantee that employees are directly
involved in decision making and are provided with the authority/power to make
decisions as opposed to just allowing them to collaborate with (either directly or
indirectly) those that make the decisions. Cox et al. (2006) refer to the important role of
line managers in ensuring that EIP initiatives are successful and similarly they have an
important role to play in implementing and applying the mechanisms to facilitate
employee empowerment within organizations.
The Pardo del Val and Lloyd (2003) measure also focused on the level of employee
empowerment at three different stages of decision-making, thereby enabling an insight
into the universality of empowerment practices. The majority of respondents indicated
a substantial amount of collaboration (55.9 per cent), directness (46.2 per cent), and Employee
degree of influence (49.5 per cent) at the identification of problems stage. However, empowerment
empowerment at the “design alternatives and ultimate decision” and the
“implementation and control” stages was not as strong, with the majority of
respondents only indicating a moderate level of empowerment. These findings are
consistent with the EIP literature, which suggests that the level of EIP is less in respect
to strategic as opposed to functional areas (Wheeler, 2002). Hence, while many 591
organizations are empowering employees they appear to be limiting their involvement
to identifying problems. Accordingly, organizations need to concentrate on the
substance of their empowerment practices and not just provide lip service to employees
but actively involve them in the making of decisions and allow them to be responsible
for the implementation and control of chosen courses of action.
The second objective of the study was to examine the association between the
organizational and cultural factors with the extent of adoption of employee
empowerment. The results revealed that both organizational (training) and cultural
(team work) factors were associated with the level of adoption of employee
empowerment in Australian manufacturing organizations. In respect to training, the
results reveal that an environment in which more extensive training is provided is
more conducive to the implementation of employee empowerment. This association
could be interpreted two ways. First, it can be argued that more extensive training is a
consequence of introducing an employee empowerment philosophy within an
organization, with the organization required to educate and prepare their employees
with the required knowledge and skills (Cunningham and Hyman, 1999). Alternatively,
it can be argued that extensive training facilitates employee empowerment with
management more likely to initiate employee empowerment when they are confident
that their employees are equipped to assume additional responsibilities (Rago, 1996;
Dufficy, 1998; Klagge, 1998). While the direction of this association is unclear, the
findings reveal that training provides integral support to employee empowerment
practices.
In respect to teamwork, the results reveal that a more teamwork-oriented culture is
more conducive to the implementation of employee empowerment. Again the direction
of this association could be questioned with some maintaining that teamwork is an
essential component of employee empowerment and hence, organizations adopting
employee empowerment would automatically move towards a more teamwork
oriented culture. Alternatively, it is argued that it will be easier to adopt employee
empowerment within an organization that has a more teamwork-oriented culture.
Specifically, the cohesiveness of teams would facilitate the delegation of
responsibilities and tasks (Psoinos and Smithson, 2002), and the communication and
information sharing (Melhem, 2004) required under the employee empowerment
approach. Hence, a teamwork oriented organizational culture is more conducive to
employee empowerment practices.
The study also produced some interesting findings in relation to the examination of
the association between the organizational and cultural factors with each of the four
dimensions of empowerment and the three different stages of decision-making. In
respect to the three stages of decision making, the results revealed that a teamwork
oriented culture is important in respect to enhancing empowerment at all three stages
of decision making. In addition, the level of training was associated with the level of
PR employee empowerment at two of the three stages: the “design alternatives and
39,5 ultimate decision making” stage and the “implementation and control” stage. While
training was not associated with the level of empowerment at the “identification of
problems” stage this is understandable given that employees do not require any
training to identify perceived problems as they perform their normal day to day
activities. However, the fact that training was associated with the level of
592 empowerment at the two more complex decision making stages highlights that
management needs to provide more extensive training to their employees if they wish
to fully implement employee empowerment within their organization.
In respect to the different dimensions of employee empowerment, the findings in
regard to the extent of collaboration in decision-making were identical to the overall
results with the level of training and a more team oriented organizational culture
positively associated with the extent of collaboration. The extent to which the
empowerment process was formalized was found to be associated with those
organizations with higher levels of training, a more outcome oriented culture, and a
less innovative culture. While these findings suggest organizations need to be more
outcome oriented and provide extensive training to employees, they also suggest that
the formalization of employee empowerment may be restricted by the level of change
(innovativeness) within organizations. Hence, organizations may refrain or be reluctant
to introduce policies, rules, and/or procedures, which guarantee employee participation
in decision-making processes due to the high level of change that takes place within
their organization. In respect to the directness of empowerment, understandably it was
found that employees contributed more directly to the decision-making process when a
stronger link was found between rewards received and exhibiting employee
empowerment behavior. Finally, the teamwork dimension was also associated with
the extent to which employees had been given authority to make and implement their
decisions (the degree of influence). These findings assist organizations by providing an
insight into the organizational and cultural factors that are associated with specific
empowerment dimensions, and thereby provide a means by which organizations can
enhance overall employee empowerment levels.

Limitations and further research

The study is subject to the usual limitations associated with the use of the survey
approach, including the simplification of questions, inability to probe answers, issues
of control as to who completes the survey, and ensuring response rates. The
incorporation of Dillman’s (2000) Tailored Design Method helped to alleviate the latter
two of these concerns. In addition, the use of the survey approach only enables us to
ascertain associations between both teamwork and training with employee
empowerment and the direction of this association is debatable. Future studies can
explore these associations further.
The data obtained was provided by production managers, who might not have been
familiar with the concept of employee empowerment, or the organizational and cultural
factors assessed in the study. Accordingly, future studies may explore these issues
using alternative respondents. In addition, given the analysis has relied on self-report
data, which has been collected from the same individuals the study is also potentially
subject to social desirability bias or common method bias. However, the fact that
relatively full ranges were obtained in respect to the variables measures suggests that
social desirability bias was not a problem. In respect to common method bias, Employee
alternative data sources were not feasible and we rely on Crampton and Wagner (1994) empowerment
who maintain that the problem of common method bias when dealing with
self-reported perceptual data is often overstated.
It is noted that the organizational and cultural factors examined in this study are not
exhaustive. The literature has identified an association between employee
empowerment with many other factors such as information sharing, industrial 593
characteristics and technology, and future studies could use the Pardo del Val and
Lloyd (2003) measure to further explore such empirical relationships. Finally, while
this study has identified a relationship between organizational and cultural factors
with the level of adoption of employee empowerment, future studies could explore the
relationship between these factors and the success of empowerment practices.

Notes
1. The sample size of 250 was determined based on the formula of Cohen (1988), which
considers the number of independent variables, statistical significance and power, and effect
size. It was assumed that a response rate of 25 per cent would be achievable based on the
rates achieved in previous empowerment studies. The Kompass Australia directory lists all
businesses in Australia and hence, the sample is highly representative of employee
empowerment in an Australian context. Those organisations with less than 35 employees
were omitted, as they were unlikely to have a sufficient number of hierarchical levels for
decision making to be delegated to lower levels.
2. Production managers could be classified as front line workers themselves or represent the
closest level in the organisational hierarchy to front line workers. It was therefore deemed
that they were the best contact to complete the survey.
3. Given the measure of employee empowerment ranged from 12 to 84, a score of 48 indicated
indifference, or a neutral position in respect to the level of empowerment. Hence, total
empowerment scores less than 49 were considered to represent a low level of empowerment.
Scores ranging between 49 and 84 were divided into two even categories representing
moderate adoption (49-66) and high adoption (67-84).
4. Given the list of organizational and cultural factors was not exhaustive hierarchical
regression analysis was used initially to assess the overall impact of the respective group of
factors on employee empowerment.

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PR Appendix. Variable measurement
Link to rewards
39,5 Please indicate the extent to which the following statements describe reward practices in your
business unit.
.
Employees are rewarded for their participation in the decision making process within the
business unit.
598 .
Employees are recognized and rewarded based on their ability to react to changes quickly
using their own discretion.
.
Employees are rewarded for their effort in making decisions independently in their own
working area.
Training (Smith et al., 2004)
Please indicate the extent to which the training at your organization focuses on:
.
Teamwork.
.
Communication skills.
. Problem solving skills.
.
Interpersonal skills.
Business unit culture
Innovation, teamwork and innovation (O’Reilly et al., 1991).
A list of values follow, which may be used to describe the nature of the work environment in
business units. For each item please indicate the extent to which it is valued in your business
unit.
(1) Innovation:
.
a willingness to experiment;
.
not being constrained by many rules;
.
being quick to take advantage of opportunities;
. being innovative; and
.
risk taking.
(2) Teamwork:
.
fairness;
.
respect for the rights of the individual;
.
tolerance;
.
being socially responsible;
.
being people oriented;
.
being team oriented; and
.
working in collaboration with others.
(3) Outcome orientation:
.
being achievement oriented;
.
having high expectations for performance;
.
being results oriented;
.
being analytical; and
.
being action oriented.
Extent of adoption of employee empowerment Employee
Please complete the following questions in respect to front line workers. Front line workers are
defined as employees working in the lowest level of hierarchy within your organization. empowerment
(a) Please indicate the level of collaboration the front line workers have in respect to each
of the three decision making stages:
(i) Identification of problems.
(ii) Design alternatives and ultimate decision.
599
(iii) Implementation and control.
(b) Formalization of empowerment refers to employees having an official channel or
certain norms or rules to guarantee their participation. Please indicate the extent of
formalization of empowerment in respect of front line workers for each of the three
decision making stages:
(i) Identification of problems.
(ii) Design alternatives and ultimate decision.
(iii) Implementation and control.
(c) Directness of empowerment refers to employees contributing directly to the decision
making process or through intermediates i.e. superior, another colleague. Please rate
the directness of empowerment in your work place in respect to front line workers for
the three decision-making stages:
(i) Identification of problems.
(ii) Design alternatives and ultimate decision.
(iii) Implementation and control.
(d) Degree of influence refers to the extent to which you have authority/power to make and
implement decisions about tasks. Please rate the degree of influence of front line
workers in each of the three decision-making stages:
(i) Identification of problems.
(ii) Design alternatives and ultimate decision.
(iii) Implementation and control.

About the authors

Kevin Baird is a Senior Lecturer in the Department of Accounting and Finance at Macquarie
University, Sydney, Australia. His research interests include: activity based management
practices; total quality management; performance measurement systems; management control
systems; outsourcing; employee organizational commitment and employee empowerment. Kevin
Baird is the corresponding author and can be contacted at: kbaird@efs.mq.edu.au
Haiyin Wang is a Research Associate in the Department of Accounting and Finance at
Macquarie University, Sydney, Australia. Her research interests include employee empowerment
and behavioral management accounting.

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