5 Ways Disempowerment Can Impact Your Organization
In our last blog, "A Quick Introduction to Empowerment at Work by Cultivate", we defined empowerment in the context of the workplace and employee experiences. We also provided a lens to assess empowerment in your company through Cultivate's SPACE Model.
All this work to understand empowerment at work is crucial. Research has consistently shown that when employees are empowered, they feel more engaged and valued. This results in happier employees who are more likely to stick around, be more creative and motivated, and develop new ideas that help the company grow.
But it's also interesting and helpful to see the other side of the coin. What happens in a disempowering workplace? How does the lack of empowerment in organizations impact employees and the business as a whole?
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Here are five major consequences of disempowerment in the workplace:
1. Low employee engagement (and consequently , lower product or service quality)
Employees who feel disempowered tend to have lower morale, satisfaction, and engagement levels.
If all these things are low, in that type of work environment, you can expect that employees will not be doing their best work, so quality is likely to decrease, as well as behaviors like going above and beyond their roles or proposing innovative new ideas. .
This consequence is particularly common in organizations with rigid hierarchical management structures.
Case study: In the 1980s, General Motors (GM) struggled with a hierarchical management structure that limited employee input. This resulted in decreased morale and a lack of engagement among its workforce, contributing to quality issues and damage to the company’s reputation.
2. Reduced innovation and agility
Employees who lack empowerment may hesitate to share innovative ideas or take creative risks.
The world moves quickly, and change comes fast. For large organizations to adjust to different market forces and changes, they must have more people watching out for and thinking of those shifts.
When employees aren’t invited to influence the direction of the company, they are less likely to share valuable information and perspectives that aren’t visible to the smaller number of people with top-level power in the organization. Consequently, the organization might miss out on important opportunities for innovation.
Case study: In the early 2000s, Yahoo! faced difficulties in innovation due to its rigid corporate culture. The lack of empowerment for employees led to missed opportunities in the rapidly evolving internet industry.
3. Higher turnover
Disempowered employees are more likely to seek opportunities elsewhere, leading to higher turnover rates.
Empowerment isn't the only thing that impacts turnover rates. Of course, other factors can keep people in a job even if they lack empowerment, such as very high salaries or strong connections to the people they work with.
However, because a lack of empowerment is a major contributor to dissatisfaction and disengagement, it is worth considering as a contributor to high turnover rates.
Higher turnover increases costs in a number of ways, from the cost of hiring and onboarding to the costs entailed by negative impacts on customer experience.
Case study: At Uber, a lack of empowerment for drivers combined with poor work conditions contributed to high turnover rates and frequent strikes, leading to disruptions in service and customer satisfaction.
4. Inefficiency and negative customer impacts
A lack of empowerment can also lead to slow decision-making processes. When decisions are concentrated at the top, and employees don't have the authority to make customer-centric decisions independently, it can result in poor customer service and reduced customer satisfaction.
When those who interact with your customers most do not have the level of empowerment necessary to adjust to those customers’ needs without layers of approval from management, it's going to slow down resolutions, which is a recipe for unhappy customers.
Case study: Comcast faced a series of customer service controversies, with employees often lacking the authority to resolve customer issues without having extensive approvals. This damaged its reputation and led to customer dissatisfaction.
5. Legal and compliance risk
When employees aren't empowered to make ethical decisions, businesses may face legal and compliance issues.
People need to have the autonomy to accomplish a goal in an ethical way and to mitigate the negative influence of unethical colleagues or leaders, when necessary. Employees need to also be empowered to report compliance issues without dire consequences to their jobs.
Case study: Volkswagen experienced significant legal, financial, and reputational consequences a few years ago over accusations of manipulating emissions data. Some contributing factors to this problem were unreasonable cost savings goals by leadership and a culture of punishment for not achieving those goals. They were tasked to produce much cheaper cars; if they didn't, they would face significant consequences. This pushed people to do whatever it took to hit those goals.
Take action against disempowerment!
It's important to understand the consequences of disempowerment and take action to empower yourself and others within your organization.
Cultivate helps companies meet their employees' empowerment needs and create more empowering workplace cultures by helping leaders identify the current state of empowerment across the organization, collaborating to drive creative solutions, and helping individual employees and managers develop tools, skills, relationships, and knowledge they can use to empower themselves and each other. Reach out here.
