Measuring employee empowerment can be tricky

Measuring employee empowerment can be a tricky business, but employers that successfully achieve this may have happier staff, lower rates of absence and increased productivity levels, says Nick Golding

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Employee empowerment is created by a loosening of the reins by employers and the passing of trust onto employees. In practice, this means moving away from dictating how the land lies to staff by allowing them to access information that they were not previously privy to and offering them an extended freedom of choice. In many cases, it also represents a shift away from the traditional relationship between employers and staff to one that is built on emotions.

The benefits of embracing this approach can result in employees feeling more commmitted to their job and their employer.

Peter Thompson, director of the future work forum at Henley Management College, says: “Genuinely empowered employees are happier at work. They drive down absenteeism rates and their productivity levels are higher.”

The problem is employee empowerment can be tricky to measure, because there is a difference between staff merely being ‘happy’ and them being ‘genuinely happy’ at work. As a result, the term ‘empowerment’ is often casually touted around.

“A lot of managers talk about empowering employees and then treat staff like children, saying they have to be in at [a certain] time and so on. It is all part of allowing employees choice and control over their conditions of work. Coming into this is the choice of the benefits that are offered,” explains Thompson.

Benefits can go a long way towards creating a sense of empowerment for employees. By ensuring that perks are relevant for staff, and by giving them a say in the package they receive, employers can create a genuine feeling of empowerment among employees, rather than a relationship that is superficial and doesn’t reflect what staff really feel.

One such benefit is allowing staff to work flexibly. Enabling them to manage their own work-life balance can demonstrate an employer’s trust in its workforce, which can lead to employees feeling empowered.

The rise in importance of flexible working arrangements, which give employees the option of managing their own hours as opposed to being forced to work a standard nine-to-five day, has been illustrated by Roffey Park’s Management agenda 2006 which revealed that 56% of managers want to introduce flexible working.

Claire McCartney, senior researcher at Roffey Park who was involved in conducting the research, explains: “Flexible working is an effective way of empowering employees. It builds trust, loyalty and commitment. Even if you just afford flexibility, not everyone will take it up, but by knowing it is available employees will go the extra mile.”

Accountancy firm KPMG offers flexible working arrangements to all staff, and believes they are an essential tool for empowering its workforce. Cheryl Curtis, reward manager, explains: “We want to show trust and encourage employees to stay in the firm so we have options such as early starts.

“It’s about saying ‘we value you, we trust you and we want you to stay’.”

Many organisations, however, have yet to move away from the traditional view of flexible working, which limits staff to simply being permitted to stagger the times they start and finish, explains McCartney.

“There are many creative methods such as buying and selling holiday, extended and compressed working weeks and home working,” she says.

According to Thompson, home working is one of the most effective ways of imparting trust onto employees, and thus empowering them. “That’s real empowerment because it says, ‘I don’t need to look over your shoulder while you are working’,” he explains.

The choice involved in flexible benefits schemes also offers the scope to empower employees, as it is an opportunity for employers to offer staff a pot of money to spend how they please. Although, on the face of it, flex provides choice for staff, employers must be careful to provide sufficient options for employees to select from, because they will otherwise be in danger of limiting the capacity of such a scheme to empower staff due to this lack of choice.

Similarly, employers should also ensure that they include benefits options that employees actually want and are prepared to take up. There is little point in selecting a range of benefits, which staff do not utilise.

Forward-thinking employers have cottoned on to this concept and have introduced measures such as employee councils or conducting regular staff surveys in order to ensure they are involved in the selection process and so will actually value the benefits on offer.

Although the Information and Consultation Directive, which came into effect in April 2005 and will affect all organisations with more than 50 staff by March 2008, requires employers to set up an employee works council if requested to do so, these are not obligued to discuss which benefits staff would value. The only time when employers may be required to use a council for this purpose is when a move involves a change to employees’ terms and conditions.

KPMG has gone a step further with its Employee Business Forum which was set up to tackle, among other issues, the benefits it offers to staff.

The forum includes representatives from different departments at the firm, while employees who are not involved can request that certain topics are raised at meetings.

“At the forum, the elected body choose their own agenda and decide what they want to discuss. These points are then raised with senior management,” explain Curtis.

Many organisations are beginning to acknowledge the value in detaching themselves from the benefit decision-making process, and handing the control to the end users, employees.

Gareth Jones, senior flex consultant at Aon Consulting, explains: “There is a very strong desire now to involve employees in decision making either right from the start or as a rubber stamp to ensure what is being introduced will work for them.”

While providing different benefits options and enabling staff to work flexibly are clear ways of offering choice to employees, there are also more subtle ways of empowering staff, and giving them some control over benefits decisions.

Self-service HR systems, for example, are becoming more commonplace. These allow staff to take ownership of personal information held on file relating to their benefits.

Benefits calculators and modelling tools work along similar lines. These online tools allow staff to instantly see the value of certain benefits, and calculate both their current and future value. For example, around company car schemes, employees can work out how much driving a certain car will cost them in tax per month at the click of a button. Such tools can also be used for pension scheme calculations and projections.

Christopher Hopkins, director at communication specialists Caburn Hope, explains: “You can forecast the future, and ask ‘what if I did this or did that’? You can play around with the future, and understand your pension’s value.”

Giving control back to employees by enabling them to better understand and decide how to deal with their pension is a crucial step to empowerment. Ian Buchan, brand development manager (corporate pensions) at Standard Life, explains: “People buy with their eyes, and when they can visually see a graph or pie chart with information about their pension scheme they can make informed decisions. It’s no longer just a letter that comes through the post once a year.”

But employers must not be scared to hand over this detail, nor underestimate employees’ knowledge of pension schemes, explains Thompson. “There is sometimes a bit of snobbery among benefits professionals who think that if you give employees details on their pension plan they won’t understand it. But [staff] are people who buy their own life assurance policies [and] endowment policies, so never say they won’t understand their own pension,” he says.

Employers can even help to empower staff around benefits by providing education to those who are interested in making changes to their pension scheme, for example.

Mike Ashton, senior consultant at Watson Wyatt says: “True empowerment comes from offering reward to encourage financial awareness and helping people to manage their own lives.”

As changes were made to UK pension schemes to comply with new pensions tax simplification rules, which came into effect in April 2006, offering access to financial advice or education became popular, as there was an increased need for staff to understand their company’s pension scheme and how it would be affected. In many cases, this empowered employees to make their own decisions.

Yet, with any of these benefits, it is not enough for employers to merely offer them to staff and expect to reap the rewards of a more empowered workforce. For this to occur, employees must understand and value the importance of their packages, and the choices they have been given.

Communication around benefits, therefore, plays an important role. While employers may choose to offer benefits that empower staff they must also make sure that they communicate them properly by tapping into employees’ emotions. “Empowerment involves emotions and while many employers are very good at displaying a process, there is no emotional attachment at all,” says Hopkins.

It is this crucial transition that appears to be letting a vast number of companies down, as they are willing to provide the benefits but cannot communicate them in a way that empower staffs. “This is endemic. There is a general lack of understanding on the transition between displaying and then communicating effectively. It is the transition between the rational and the emotional that is absent,” adds Hopkins.

While assumptions could be made about the types of organisations that may be more effective at empowering staff than others, there appears to be little in the way of factual data to back this up.

Traditionally, some benefits such as flexible working have been perceived to be better suited to smaller more robust organisations, while larger firms were thought to be less inclined to change their well-established working practices.

“In the past, in a very paternalistic way, large employers have patted employees on the head and said ‘they won’t understand anyway so we won’t bother their tiny little minds with details’,” Thompson explains.

While attitudes in some quarters may be changing, there are still some human resources departments, that believe this is the most effective way to operate, explains Aon’s Jones. “I think there is sometimes a feeling that HR knows best, a sort of ‘that’s what you need’ approach rather than asking what staff want,” he says.

But this ideology is slowly being pushed out, as employers appear to recognise employees’ preference for choice. This could be due to the effect of today’s consumer-led society spilling over into every working environment, which has forced employers to offer their staff the choice that they may have come to expect.

A thirst for choice

Many employees, whatever the size of the organisation, are no longer content with simply taking what they are given. “Now companies of all sizes are realising that to be an employer of choice they are dealing with a much more consumer-conscious set of employees. A group of people who are used to choice don’t like to be told ‘take it or leave it’ as they may have been in the past,” adds Thompson.

Employers which realise that benefits can help to empower staff if they are introduced effectively and offer an adequate amount of choice, are likely to enjoy genuinely empowered workers

Which Benefits empower staff?

• Flexible benefits packages, by their very nature, offer choice. Employees who have more choice and control over the benefits they want will ultimately feel empowered.
• Flexible working arrangements allow employees to manage their own hours at work, whether this is by altering start and finish times, working from home or part-time work in order to gain a better work-life balance. It shows that employers trust staff to remain productive outside of a rigid time frame and supervision.
• Benefits calculators and modelling tools allow employees to see at a glance the value of different benefits, and forecast the value of perks. These are available for a variety of benefits such as pensions and company cars.
• Financial education is an opportunity for employers to empower employees by arming them with information to help them decide how to deal with their finances. This can be particularly useful when helping staff to understand legislative changes such as the new pensions tax simplification rules which came into effect in April.

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