Empowering Your Staff on a Budget: The Complete Guide

Chapter 1

Why should employee empowerment be on your agenda?

Employee empowerment means trusting your staff with the authority to do their jobs in the ways they see fit. It’s the opposite of micromanaging, and it involves managers relinquishing a significant amount of day-to-day control.

But why on earth would you do that?

It’s a cultural thing

Modern employees want to make a difference. They want autonomy. They want the freedom to think through issues and work out ways to solve them. 

That’s not surprising. Studies show that autonomy leads to happier, more motivated staff, who are less likely to leave.

It’s a retention thing

Employee empowerment leads to more loyal staff. And that’s important. US statistics show that in 2018 workers left their jobs at the highest rate for nearly 20 years. Forbes reports that 49% of millennials plan to move jobs within two years.

It’s a fulfilment thing

And they’ll leave because work, for them, is about more than just a paycheck. Millennials want fulfilment and satisfaction in their work as much as money. They want work with purpose. And they want to contribute creatively to a wider goal. In an SHRM survey, 70% of employees ranked being empowered to take action at work as an important element of engagement.

It’s a digital thing

Digital technology and communication means decisions that once took weeks are now made in hours. An agile business requires quick thinking staff with the freedom and confidence to make decisions for themselves. A McKinsey report shows that “agile organisations have a 70% chance of being in the top quartile of organizational health, the best indicator of long-term performance.”

Customers are digital and agile too. They have endless choice, often just a click away. Their satisfaction depends on your ability to nimbly meet their needs. 

“If you have the opportunity to please people, to make a customer smile, you go home feeling better—and sometimes it takes autonomy to do that.”

Lisa Barrington, HR consultant

Strict top-down hierarchies have had their day

A study published in the California Management Review found that SMBs with a non-hierarchical, family-like structure are more likely to succeed. 

This isn’t to say anarchy must reign. John Colley, a professor at Warwick Business School, says that “while there’s agreement fewer layers are better, no hierarchy is chaotic.”

Employees need to know what they’re working towards. They need autonomy within defined limits. For SMB leaders, it means having the confidence to set a mission, strategy and objectives, and give capable employees freedom within those parameters. SMB leaders need to learn the subtle art of letting go.   

“Employee empowerment is, for all intents and purposes, the opposite of micromanagement.”

HRD Connect

What does employee empowerment feel like?

It certainly doesn’t feel like staff running amok. It means tight teams with independence but end-to-end accountability. Employees get to make decisions that they recognise are important and of real value and take responsibility for them. That makes for happier, more satisfied staff. 

“Greater levels of control over work tasks and schedule have the potential to generate significant benefits for the employee, which was found to be evident in the levels of reported well-being.

Dr Daniel Wheatley, University of Birmingham Business School

Mistakes will happen, and they need to be discussed and learned from. They also need to be forgiven. Punishing staff for making the wrong call for the right reasons is no longer an option. A blame culture leads only to stagnation, as staff shy away from innovation and experimentation.

Chapter 2

Empower from the top

How do you encourage employee empowerment in your SMB? You lead it. You drive it. Without setting out a vision and strategy, employee empowerment is just a chaotic clash of competing ideas. 

And it isn’t an instant fix. Culture doesn’t change overnight. It’s a gradual process of assimilation. But it starts with you.

You can tell them, but demonstrating that you believe in their skills is even better employee management. Delegate to them – and that means creative tasks and not just the drudge work that nobody else wants to do. Give them autonomy over important projects (at their level in your business). Set expectations, but let individuals or teams find their own way to the end goal.

As staff get used to this new world of employee management, they will naturally become more confident and proactive. They will enjoy more work satisfaction.  And along the way, they’ll be picking up new skills that will bring you further value.

It’s a truism that football managers are only three or four bad results from the sack – but that’s a bad way to run a business. Good employee management means being the opposite of an impatient football club chairman. Let employees make mistakes (within defined limits) and learn from them. Appreciate effort and innovation, even if the outcome is not always perfect. Let them grow into new responsibilities. Punishing initiative means encouraging conservatism and, ultimately, stagnation. 

Positive reinforcement is essential to employee empowerment. Many staff members will be worried by what they see as new burdensome responsibilities. When they use their newfound autonomy, praise them for doing so, and use positive feedback. Staff who receive positive feedback are likely to do the good things again, while learning from mistakes. It’s surprising how many managers – 40% in one survey – don’t offer any positive feedback at all. None of this, of course, costs a penny.

The key to employee management is communication. Talk to staff about your vision and their part in it, and also share company information with your staff. Share as close to everything as you can: financial updates, progress reports, annual results, customer satisfaction scores and so on; good and bad. Make your employees fellow travellers on the company journey. And remember that communication is reciprocal. Listen to what your employees have to say and include their ideas in goals and strategy.

Be clear, concise and direct. Don’t be like the boss of one of the 46% of workers who say they often leave meetings not knowing what they’re supposed to do next!

It’s essential that you communicate well, offer constructive feedback and believe in your team. It’s crucial that line managers do too, because they are the conduit through which your vision and strategy reaches employees on a day to day basis. Many line managers gain their position through technical or operational excellence, not necessarily having had any formal management training. If that’s the case, nurture them with communication skills so that they can grow into the managerial aspect of their jobs.

Chapter 3

The systems for employee empowerment

Leadership is the attitude that delivers employee empowerment, but there is plenty of strategic help on the well-trodden path to maximising the effectiveness of your team. SMBs must put the systems and policies in place to encourage and facilitate an empowered regime.

Boundaries

This is the big one. Employee empowerment is not a free-for-all. For it to work, there needs to be boundaries within which employees are free to tread their own path. Autonomy within boundaries promotes action. Autonomy without boundaries creates paralysis, as anxious employees self-impose their own limitations. Remember, while employee empowerment does involve a degree of freedom, it also involves support, direction, guidance and rules that may be flexible – but are rules nevertheless.

Growth paths

Empowering employees means giving them new freedoms, responsibilities and opportunities to grow. People want to progress, and millennials in particular view work as a continual learning opportunity. Reward their efforts with routes to advancement; and help them to reach for the next level.  

The HR approach

Employees will feel empowered when they are allowed to take decisions for themselves. That includes decisions – again, within limits – over where, when and how to work. Trust your employees to work productively without permanent oversight. We know that workers want flexible hours and remote working options. Encouraging autonomy means giving employees more control over their time. Judge them by what they do for the business, not by how long they spend at their desks. 

Expenses

Employee empowerment gives staff the freedom to make instant decisions; for example on going above and beyond for a customer. After all, we all know how dispiriting it is to hear a company representative say “I’ll have to go and talk to my manager…” Sometimes, that costs money, and you empower employees when you trust them to spend company money wisely. 

Soldo is a prepaid business card, connected to a powerful management platform, which lets employees spend money within preset limits without having to continually ask your permission. It gives employees the freedom to make agile spending decisions, alongside the peace of mind that comes from knowing they can’t break company spending rules.

Decision making

Sometimes empowered employees will make decisions on their own, but often they will make them together, benefitting from the combined expertise and experience of a team. An empowered workplace is one where employees naturally and seamlessly collaborate.

Encourage it by setting team goals that draw on different strengths and talents, and recognise and reward collaborative behaviour. It’s worth it. Research by Cornerstone OnDemand found that collaborative companies were more likely to be set up for high growth.

Feedback systems

Feedback is an essential part of smart employee management. Empowered employees appreciate guidance and advice when it is delivered effectively. They also appreciate the opportunity to share ideas. Use 1-2-1s, suggestion boxes, management Q&A sessions and more to offer positive, actionable feedback, and at the same time to listen to the ideas of your empowered, capable staff. Often it’s enough just to allocate an hour a fortnight for a whole-team catch-up session: obligatory, with phones switched off and tea and biscuits for all…

Chapter 4

The smart delegator – empowerment with an open mind

Employee empowerment doesn’t happen overnight, and nor will every employee want it. 

A meta-analysis of studies on employee empowerment found that, overall, it produced stronger job performance, loyalty and job satisfaction. But that wasn’t universally the case. 

When employee empowerment isn’t properly communicated or supported, some employees feel burdened with unwanted responsibility, and are more stressed as a result. They also wonder if empowerment is really for their good, or for the good of managers who don’t want to make difficult decisions. Some may just feel that it’s not part of their job description and therefore a pay cut by the back door.

But when it works…

The Harvard Business Review found that the difference between successful and unsuccessful employee empowerment largely came down to trust. If employees trust leaders, they appreciate autonomy and see its benefits.

“(The) feeling of trust helped to explain the effects of empowering leadership on both creativity and citizenship. This is because trust reduces uncertainty in the environment by instilling a sense of safety, which enables employees to take on more risks without feeling vulnerable.”

Harvard Business Review

Trust manifests in real business benefits:

To facilitate successful employee empowerment a business owner must:

Chapter 5

Employee empowerment on a budget

Small businesses don’t have a lot of money to throw at employee empowerment. Hiring HR and management consultants to help is not an option. But it can still be done. Here’s how.

Determine need

Not all employees want or need empowerment. Staff that are largely engaged in repetitive, basic tasks won’t instantly benefit (although by broadening their horizons, they will likely enjoy contributing more to the business anyway).

But in a modern SMB, most staff will. The benefit of empowered, autonomous and agile employees can be seen particularly in customer-facing roles, in positions which require problem-solving skills, and where rapid technological change is commonplace – and that’s most of us! 

Nurture trust

Preparing the ground for employee empowerment means nurturing trust. Employees who trust your leadership are open to empowerment, not suspicious of it. Trust also brings wider benefits. A PwC study found that 55% of CEOs think that a lack of trust is a threat to business growth. 

“Compared with people at low-trust companies, people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, 40% less burnout.”

Harvard Business Review

Paul J. Zak, a professor of economics, psychology, and management at Claremont Graduate University, has identified eight management behaviours that foster trust. They include recognising excellence, sharing information throughout organisations, socialising and connecting, and focusing on both the professional and personal growth of employees.

Create information sharing networks

As Zak says, one way to nurture trust is to share information. Uncertainty creates stress. Knowledge of a company’s performance, ambitions and strategy give employees a goal to work toward. “Organisations that share their ‘flight plans’ with employees reduce uncertainty about where they are headed and why,” says Zak. 

But the communication has to be regular – an annual report to staff won’t do. Set systems in place to share every success, every bump in the road, and every management decision with all staff. This can be through digital tools, but in small businesses it’s more fun to hold a regular all-staff lunch.

Set visions, strategies, goals and boundaries

Employees and businesses benefit from empowerment when it is contained within boundaries defined by a clear vision and strategy, and when it involves working towards attainable short and long-term goals. Take your company leaders away for a day and thrash these out.

Communicate your strategy

Tell employees about your desire to evolve management culture. Do it in person, through meetings, seminars, lunchtime Q&As and so on. Follow it up with material outlining the benefits of employee empowerment, alongside your visions, strategies and goals. Include your expectations of staff.

Start the process of empowerment by inviting feedback and acting on it. Let employees sit in on management meetings and contribute. Ask for their ideas on the aspects of empowerment that would help them in their specific roles.

Take the plunge with empowerment

Think of it as a soft launch. How implementing employee empowerment works depends to a large extent on your company and culture, but the first step might involve line managers actively encouraging autonomous decision-making during staff 1-2-1s or departmental meetings. If staff have asked for tools to help them thrash out ideas and collaborate (a tool like Slack, for instance), show trust in their decision by investing in it. Issue prepaid company cards to employees for whom empowerment also means the freedom to spend wisely.

All these actions will show employees that you are serious about promoting empowerment.

Continual encouragement, increasing adoption

Then, let empowerment percolate gradually through your organisation – it’s an evolution not a revolution. Wary staff will need to see that autonomy is appreciated (and not punished) before they move from baby steps to giant leaps. Millennials want regular feedback. Use it to keep spreading the word. 

Feedback must praise and reward autonomous decision-making and new ideas, whether successful or not. When failures occur, let employees formulate the ideas that put things right. Encourage collaboration on tricky issues and celebrate success.

The result… 

Paul Zak believes that these empowerment strategies also engender trust. Giving people discretion on how they do their jobs, and letting them craft their own roles, encourage employee autonomy and help create high-trust organisations.

The two are intrinsically linked. The more you trust your employees, the more empowered they feel. The more empowered they feel, the more they will trust your leadership. The result is more interested, satisfied and loyal employees, and a more innovative, agile and future-proof business.