This involves granting employees power to initiate change, thereby encouraging them to take charge of what they do.
E encourages employees to become innovators and managers of their own work, and it involves them in their jobs in ways that give them more control and autonomous decision-making capabilities.
E involves “pushing down decision-making responsibility to those internal and external customers.”
For encouraging E the following conditions are necessary
- Participation: Employees must be encouraged to take control of their work tasks. Employees, in turn, must care about improving their work process and interpersonal work relationships
- Innovation: The environment must be receptive to people with innovative ideas and encourage people to explore new paths and to take reasonable risks at reasonable costs. An empowered environment is created when curiosity is as highly regarded as is technical expertise .
- 3.Access to information: Employees must have access to a wide range of information. Involved individuals decide what kind of information they need for performing their jobs
- 4. Accountability: E does not involve being able to do whatever you want. Empowered employees should be held accountable for their behaviour toward others, producing agreed-on results, achieving credibility,and operating with a positive approach
- E thrives where the culture of the organization is open and receptive to change. Culture is created through the philosphies of senior managers and their leadership traits and behaviour.
- Effective leadership in an empowered organization is highlighted by managers who are honest, caring, and receptive to new ideas, and who exhibit dignity and respect for employees as partners in organizational success.
In the absence of incentive schemes employees tend to only meet the minimum performance standards.However,when incentives are linked to output, workers will increasingly apply their knowledge and skills to their jobs and will be encouraged to work together as a team.
Incentive Plans are grouped under three categories:
- Individual Incentive Plans
- Group Incentive Plans
- Enterprise Incentive Plans
Individual Group Enterprise
1.Piecework Team compensation Profit sharing
2.Standard hour plan Scalon Plan Stock options
3.Bonuses Rucker Plan ESOPS
4.Merit pay Improshare
5.Lump-sum merit pay
8.Incentives for professional employees
Generally Incentive schemes are linked with organizational objectives both on an individual or group basis. These could be
(a) Lowering labor costs
(b) Improving customer satisfaction
(c) Expand product markets
(d) Maintain high levels of productivity and quality
Advantages of Incentive Pay Programs:
- Employee efforts focus on specific performance targets
- Variable costs linked to achievement of results
- Both quality and quantity parameters are to be met
- Incentives foster teamwork and unit cohesiveness
- Incentives are a way to distribute success
- Incentives are a way to reward or attract top performers
Successful incentive programs should be- linked to valued behaviour,fair to employees,set challenging but achievable productivity/quality standards with payout formulas simple and understandable.