Management actions to combat recessions could compromise the performance effects of empowerment

Posted by ap507 at Aug 22, 2016 10:35 AM |
Latest study by Stephen Wood at the University of Leicester finds wage and employment freezes impact on morale

Issued by University of Leicester Press Office on 22 August 2016

Wage and employment freezes and other actions taken to combat recessions may compromise the positive effect that employee empowerment may have on staff morale and in turn performance.

These are the findings from a new study by Professor Stephen Wood from the University of Leicester and Chidiebere Ogbonnaya from the University of East Anglia, to be published in the Journal of Management.

Their study found strong evidence that empowering employees to make decisions has a big influence on their job satisfaction and well-being, both at work and generally. Indeed the link between job autonomy and well-being and its knock-on to health is one of the strongest in the social sciences (as well as medicine).

There is also strong evidence that empowerment has positive effects on both individual and organizational performance and the staff morale is a major reason why. Yet, actions typically taken by management during recessions, such as wage and employment freezes, major restructurings of jobs, and the intensification of work, may have a negative effect on individual’s morale and commitment.

The research shows that these negative effects reduce the positive gains – for both employees and employers – of individuals being given autonomy and discretion and variety in their work. The side effect of recessionary actions is to reduce the efficacy of individual-level employee involvement. This in turn reduces the performance effects of empowerment. 

The effects of recessionary actions on organization-level involvement – through team working, problem-solving groups, idea-capturing schemes, and information-sharing – are not the same. Such organizational involvement also has positive effects on organizational performance, but makes little difference to levels of satisfaction or well-being. The level of job dissatisfaction and ill-being created by recessionary actions was in fact less in workplaces with high levels of organizational involvement.

Stephen Wood suggests that “through participating in organizational involvement activities workers may have more information and a greater certainty about the future.”

The research is based on data from questionnaires completed by 11,538 employees within 1,119 workplaces, as part of the government-sponsored British Workplace Employment Relations Survey (WERS) of 2011. Questions specifically on what actions the employers had taken in the light of the recession and that employees had directly experienced during the post-2008 recession were included in the 2011 WERS for the first time in the survey series.

55% of participants experienced at least one action: 31% two or more, and 24% one action. Wage freezes or reductions (35%), increased workload (28%) and work reorganization (21%) were the most mentioned actions.

The implications of the research are that there is a tension between empowerment and recessionary actions but that organizational involvement may mitigate some of the negative effects of recessionary actions on employees’ morale.

The research confirms the power of involvement at both the individual, task level and the wider organizational level and that more attention should be paid to it in the debate around productivity. Indeed it may be that this is so strong that there is no real productivity puzzle, just a neglect of the importance of employee involvement.

ENDS

Notes to editors:

online access to the full text of your article at the link below: http://jom.sagepub.com/cgi/reprint/0149206316659111v1.pdf?ijkey=4i7pOpOavNy2CC0&keytype=finite   

Professor Stephen Wood is available on s.j.wood@le.ac.uk

The 2011 WERS was jointly sponsored by the Department for Business Innovation and Skills (BIS), the Economic and Social Research Council (ESRC), the UK Commission for Employment and Skills (UKCES), the Advisory Conciliation and Arbitration Service (Acas) and the National Institute of Economic and Social Research (NIESR). NIESR’s contribution was made possible by a grant from the Nuffield Foundation. None of these organisations bears any responsibility for the authors’ analysis and interpretations of the data.

The data from the 2011 WERS is available through the UK Data Service: http://www.ukdataservice.ac.uk

 

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