Empowerment: giving employees shared authority, responsibility, and
decision-making with their managers.
o Uses the brainpower of all workers to find better ways of doing their
jobs, serving customers, and achieving organizational goals.
One of the most effective ways to empower employees is to keep them
informed about the companys financial performance.
o Employees will understand more about the organizations strategic
thinking and how their own work fits into the overall plan.
o They will then be able to better direct their work efforts to make use
of company resources.
o A major risk is that private company information may reach
Employees may also be empowered by being given broad authority to make
decisions that carry out a firms vision and its competitive strategy.
Companies offer worker ownership in two ways:
o Employee Stock Ownership Plans (ESOP)
About 7% of Canadians participate in ESOPs.
ESOPs benefit employees by giving them stock ownership in
their companies (can lead to profits when stock values
The employer buys shares of the company stock on behalf of
the employee as a retirement benefit. When employees leave
the company, they can cash in their stock shares.
When ESOPs are used for retirement funds, they must follow
government regulations designed to protect pension benefits.
One major danger is if the majority of an employees
retirement funds are in company stocks and the value falls
dramatically, the employee may lose financially.
o Stock Options
Employees are given the rights to buy a specified amount of
company stock at a given price within a given time period and
they can choose to excise (use) their options by purchasing the
About one-third of all stock options go to the top five
executives at firms who use stock options.
9 million employees in thousands of North American
companies hold stock options.
Team: a group of people with certain skills who share a common purpose,
approach, and performance goals.
All team members hold themselves responsible and accountable for reaching
their objectives. Many firms emphasize the importance of teams during their hiring process
because they want people who can work well with others.
Five basic types of teams are:
o Work Teams
Relatively permanent groups of employees with
complementary skills who perform the day-to-day work of
Used by about 2/3s of firms.
o Problem-Solving Team
A temporary combination of workers who gather to solve a
specific problem and then disband when the problem is solved.
o Self-Managed Team
A work team that has the authority to decide how its members
complete their daily tasks.
Members are cross-trained to perform each others jobs as
Allows for the focus to be put on satisfying customers.
Most effective when team is comprised of employees with a
range of skills and functions.
o Cross-Functional Team
A tem made up of members from different functions, such as
production, marketing, and finance.
Usually work on specific problems or projects, but can also
serve as permanent work teams.
Benefit is the different perspectives that the different members
can bring to solve the issue at hand.
o Virtual Teams
Groups of geographically or organizationally separated co-
workers who use telecommunications and information
technologies to accomplish an organizational task.
The main advantage is their flexibility (location/time zone etc.
Teams must be an appropriate size to accomplish their work.
Research on team effectiveness shows that teams achieve their best results
with 6 or 7 members.
o Big enough to benefit from a variety of diverse skills, yet small enough
that members can communicate easily and feel part of a small and
General rule: a team of more than 20 people should be divided into sub-
teams, each with its own members and goals.
Team level: the teams average level of ability, experience, personality, or any
o Considered when a company needs teams with a particular skill set to
do their jobs well. Team diversity: the teams differences in ability, experience, personality, or
any other factor.
o Team diversity is an important consideration for teams that must
complete a wide range of different tasks or complex tasks.
Teams typically progress through five stages of development:
The orientation period when teams members get to know each
other and learn what behaviours are acceptable to the group.
Team members begin with curiosity about what they are
expected to do and whether they will fit in with the group.
Individual personalities come out, as members clarify their
roles and expectations.
Conflicts may arise, as people disagree about the teams
mission and compete for position and control of the group
(subgroups may form).
Team leader needs to encourage all to participate because for
the team to achieve productivity, it must pass this stage.
Members resolve their differences, accept each other, and
reach broad agreement about the roles of the team leader and