In the 1970s, Theodore Levitt presented a “production-line approach to service” as the remedy for the sector’s problems of inefficient operations and dissatisfied customers. He argued that the secrets of the production-line approach could be discovered, quite simply, by looking at the world of manufacturing. Industrial practices such as the simplification of tasks and the substitution of technology, equipment, and systems for employees could be transferred to the service sector. Levitt encouraged service managers to think in technocratic rather than humanistic terms.1
In the 1990s, the “employee empowerment approach to service” is being touted as the remedy for problems of poor customer service and inefficient operations. The guiding philosophy of empowerment is nonbureaucratic and participation-oriented.2
Despite its claims, there is considerable vagueness about what actually constitutes empowerment, where and how empowerment works, and how to implement it.3 For some, it means allowing employees to decide how they will greet a customer, while for others, it includes giving employees almost unlimited discretionary spending power to recover from any service problem.
In this paper, we give an overview of the management practices that create what we refer to as an “empowered state of mind.” We then consider the complex issues concerning its effectiveness and implementation. Although we believe that employee empowerment is often the approach that will best fit a service firm’s situation, we also believe that managers need to examine more fully the evidence of empowerment’s effectiveness and the challenges and dilemmas surrounding its adoption.
Creating an Empowered State of Mind
Employees don’t just suddenly feel empowered because managers tell them they are or because companies issue statements saying it is part of the culture. Organizations must change their policies, practices, and structures to create and sustain empowerment. Employees may get a brief rush of adrenaline after a charismatic leader’s speech about how they are the front line of the company and critical to its effectiveness. However, unless all the structures, practices, and policies send the message that employees are empowered to deal effectively with customers, empowerment will not be an ongoing force.
Research suggests that empowerment exists when companies implement practices that distribute power, information, knowledge, and rewards throughout the organization.4 This happens when companies have abandoned the traditional top-down, control-oriented management model for a high-involvement or high-performance approach.
1. See T. Levitt, “Production-Line Approach to Service,” Harvard Business Review, September–October 1972, pp. 41–42; and
“Industrialization of Service,” Harvard Business Review, September–October 1976, pp. 63–74.
2. See, for example:
C.R. Bell and R. Zemke, “Terms of Empowerment,” Personnel Journal, September 1988, pp. 76–83;
T.W. Firnstahl, “My Employees Are My Service Guarantee,” Harvard Business Review, July–August 1989, pp. 28–34; and
L. Schlesinger and J.L. Heskett, “Enfranchisement of Service Workers,” California Management Review 33 (1991): 83–100.
3. We presented our own thinking on these issues. See:
D.E. Bowen and E.E. Lawler III, “The Empowerment of Service Workers: What, Why, How and When,” Sloan Management Review, Spring 1992, pp. 31–39.
4. E.E. Lawler III, S.A. Mohrman, and G.E. Ledford, Jr., Employee Involvement and Total Quality Management: Practices and Results in Fortune 1000 Companies (San Francisco: Jossey-Bass Publishers, 1992); and
E.E. Lawler III, S.A. Mohrman and G.E. Ledford, Jr., Creating High Performance Organization: Impact of Employee Involvement and Total Quality Management (San Francisco, Jossey-Bass, 1995).
5. See E.E. Lawler III, High-Involvement Management (San Francisco: Jossey-Bass Publishers, 1986);
E.E. Lawler III, The Ultimate Advantage (San Francisco: Jossey-Bass Publishers, 1992); and
Lawler et al. (1995).
6. For discussions of how service recovery can help lead to “zero defections,” see:
C.W.L. Hart, J.L. Heskett, and W.E. Sasser, Jr., “The Profitable Art of Service Recovery,” Harvard Business Review, July–August 1990, pp. 148–156; and
F.F. Reichheld and W.E. Sasser, Jr., “Zero Defections: Quality Comes to Services,” Harvard Business Review, September–October 1990, pp. 301–307.
7. The model in Table 1 is similar in its dimensions to the Job Characteristics Model. See:
E.E. Lawler III and J.R. Hackman, “Employee Reactions to Job Characteristics,” Journal of Applied Psychology 55 (1971): 259–286; and J.R. Hackman and G.R. Oldham, “Motivation through the Design of Work: Test of a Theory,” Organizational Behavior and Human Performance 16 (1976): 250–279.
The present model is intended to emphasize: (1) that empowerment can enhance the motivating potential of jobs, and (2) the importance of creating certain psychological states within employees as a key ingredient of empowerment. The face validity of this model seems strong, given what is known about job design and empowerment, but it should be noted that the model has not been empirically tested.
8. For research on how job redesign according to the Job Characteristics Model is associated with gains in employee satisfaction and quality, see:
B.T. Loher et al., “A Meta-Analysis of the Relation of Job Characteristics to Job Satisfaction,” Journal of Applied Psychology 70 (1985): 280–289; and
R.E. Kopelman, Managing Productivity in Organizations (New York: McGraw-Hill, 1986).
9. See, for example:
R.I. Beekun, “Assessing the Effectiveness of Socio-Technical Interventions: Antidote or Fad?” Human Relations 42 (1989): 877–897; and
E. Sundstrom, K.P. DeMeuse, and D. Futell, “Work Teams,” American Psychologist 45 (1990): 120–133.
10. For a summary of research on gain sharing, see:
E.E. Lawler III, Strategic Pay (San Francisco: Jossey-Bass, 1990). See also:
R.J. Bullock and M.E. Tubbs, “A Case Meta-Analysis of Gainsharing Plans as Organization Development Interventions,” Journal of Applied Behavioral Science 26 (1990): 383–404; and
C. Cooper, B. Dyck, and N. Frohlich, “Improving the Effectiveness of Gainsharing: The Role of Fairness and Participation,” Administrative Science Quarterly 376 (1992): 471–490.
11. See Lawler et al. (1992 and 1995).
12. J.L. Heskett, T.O. Jones, G.W. Loveman, W.E. Sasser, Jr., and L. Schlesinger, “Putting the Service-Profit Chain to Work,” Harvard Business Review, March–April 1994, pp. 164–174.
13. A summary of the employee satisfaction-customer satisfaction linkage can be found in:
B. Schneider and D. Bowen, “The Service Organization: Human Resources Management Is Crucial,” Organizational Dynamics 21 (1993): 39–52. See also:
B. Schneider and D. Bowen, Winning the Service Game (Boston: Harvard Business School Press, 1995).
14. Heskett et al. (1994).
15. See Bowen and Lawler (1992). The contingency model describes how three types of involvement (suggestion, job, high) represent increasing degrees of empowerment whose effective use depends on their goodness of fit with certain organizational and environmental conditions. The rationale for the choice of each contingency, and their implications for production-line or empowerment approaches to service delivery, are fully explained in the article.
16. For an elaboration of the idea that “type of organization” has become the basis of sustainable competitive advantage, see:
17. Reports of disillusionment with TQM include:
O. Harari, “Ten Reasons Why TQM Doesn’t Work,” Management Review, January 1993, pp. 33–36; and
J. Matthews and P. Katel, “The Cost of Quality: Faced with Hard Times, Business Sours on Total Quality Management, Newsweek, 7 September 1992, pp. 48–49.
18. Lawler (1992).
19. P.F. Drucker, “The New Productivity Challenge,” Harvard Business Review, November–December 1991, pp. 69–70.
20. P.S. Adler and R.E. Cole, “Designed for Learning: A Tale of Two Auto Plants,” Sloan Management Review, Spring 1993, pp. 85–94.
21. Ibid., p. 90.
22. “Autonony in Store: Self-Management at The Body Shop,” IRS Employment Trends 538 (1993): 6–10.
23. For more information on service blueprinting and service mapping, see:
G.L. Shostack, “Designing Services That Deliver,” Harvard Business Review, January–February 1984, pp. 133–139; and
J. Kingman-Brundage, “Technology, Design, and Service Quality,”International Journal of Service Industry Management 2 (1991): 47–59.
24. For perhaps the most recognized expression of this belief, see:
P. Senge, The Fifth Discipline: The Art and Practice of the Learning Organization (New York: Doubleday, 1990).
25. Adler and Cole (1993).
26. The idea that job redesign in TQM often results in simple, tightly controlled work is addressed in:
E.E. Lawler III, “Total Quality Management and Employee Involvement: Are They Compatible?” Academy of Management Executive 8 (1994): 68–76; and
J.W. Dean and D.E. Bowen, “Management Theory and Total Quality: Improving Research and Practice Through Theory Development,” Academy of Management Review 19 (1994): 392–418.
27. See Lawler et al. (1992 and 1995).
28. B. Bluestone and I. Bluestone, Negotiating the Future (New York: Basic Books, 1992).
29. The human resources (HR) trap, and its relationship to seamless service and service quality, is described in:
Schneider and Bowen (1995).