The relationship between the enabling use of controls, employee empowerment, and performance
| Date | 05 February 2018 |
| Pages | 257-274 |
| Published date | 05 February 2018 |
| DOI | https://doi.org/10.1108/PR-12-2016-0324 |
| Author | Kevin Baird,Sophia Su,Rahat Munir |
| Subject Matter | HR & organizational behaviour,Global HRM |
The relationship between the
enabling use of controls,
employee empowerment,
and performance
Kevin Baird, Sophia Su and Rahat Munir
Department of Accounting and Corporate Governance,
Macquarie University, Sydney, Australia
Abstract
Purpose –The purpose of this paper is to examine the association between Simons’(2000) enabling
(beliefs and interactive) use of controls with employee empowerment, and the subsequent influence on
organisational performance.
Design/methodology/approach –A survey questionnaire was distributed to 636 Australian
manufacturing organisations.
Findings –The findings indicate that the enabling use of controls is associated, both directly and indirectly,
through the level of employee empowerment, with organisational performance.
Originality/value –This paper provides an initial empirical insight into the relationship between the use of
controls with the level of employee empowerment. The findings highlight the significant interrelationship
between the enabling use of controls and employee empowerment and the importance of both facets in
enhancing organisational performance.
Keywords Quantitative, Organizational performance, Employee empowerment, Enabling use of controls
Paper type Research paper
1. Introduction
There is an extensive contingency-based research examining the influence of aspects of
management control systems (MCSs) on the achievement of outcomes, both organisational
and behavioural (Chenhall, 2003). For example, numerous studies have examined the
influence of the types of controls (Abernethy et al., 2007; Maiga and Jacobs, 2005; Abernethy
and Brownell, 1999; Snell and Youndt, 1995), employee incentive schemes (Baird et al., 2012;
Lawler, 2003; van Vijfeijken et al., 2002), and performance measurement systems (Lee and
Yang, 2011; Crabtree and DeBusk, 2008; Braam and Nijssen, 2004; Davis and Albright, 2004;
Baines and Langfield-Smith, 2003; Ittner et al. 2003) on organisational performance, while
other studies have examined the influence of aspects of MCSs such as the types of control
and performance management systems on employee work-related attitudes (e.g. Su et al.,
2015; Appelbaum et al., 2013; Leach-Lopez et al., 2008; Lawler, 2003). However, while the
association between management controls and performance is well established and studies
have considered the behavioural implications of controls, sparse research has considered
the control system characteristics of an empowered organisat ion, specifically the
interrelationship between the enabling use of controls and the level of employee
empowerment within organisations.
Employee empowerment involves the delegation of decision-making authority to lower
levels in the organisational hierarchy, with employees provided with the autonomy to make
day-to-day decisions about job-related activities (Bowen and Lawler, 1992, p. 31). The focus
on employee empowerment and the factors influencing it is crucial due to its increasing
relevance in organisations as they increasingly adopt decentralised structures
(Houghton and Yoho, 2005) and employ knowledge workers ( Jarrar and Zairi, 2002),
and due to its important role in high-performance work systems (Takeuchi et al., 2009;
Personnel Review
Vol. 47 No. 1, 2018
pp. 257-274
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-12-2016-0324
Received 19 December 2016
Revised 7 April 2017
13 November 2017
Accepted 26 November 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
257
Employee
empowerment
and
performance
Cox et al., 2007; Cappelli and Neumark, 2001). In addition, there is evidence that employee
empowerment has a positive influence on individuals in respect to their performance
(Kirkman and Rosen, 1999; Spreitzer, 1995) and work-related attitudes (Seibert et al., 2004;
Ugboro and Obeng, 2000), and the performance of organisations (Bordin et al., 2007;
Ozaralli, 2003; Lawler, 1994). Consequently, given employee empowerment is considered
vital for organisational success (Hellriegel et al., 1999; Hartline and Ferrell, 1996;
Lashley, 1995), this study aims to contribute to the contingency literature examining the
factors contributing to an empowered environment (Baird and Wang, 2010; Spreitzer, 1996).
Specifically, we examine the association between Simons (1995) enabling use of controls
with the level of employee empowerment, and the subsequent impact of employee
empowerment on organisational performance.
Such an analysis is considered pertinent for a number of reasons. First, there is an
apparent conflict between the notion of control, the inherent purpose of which is to influence
and restrict employee behaviour (Malmi and Brown, 2008; Merchant and Van der Stede,
2007), and employee empowerment which provides employees with autonomy. It is
acknowledged here that managers face a dilemma in respect to maintaining an adequate
control while still giving employees the freedom to be creative, innovative, and flexible. For
example, Simons (1995) noted that giving employees’autonomy can lead employees to
pursuing opportunities that could expose business activities to excessive risk or invite
behaviours that may damage an organisation’s reputation, in some cases financial losses.
Consequently, the analysis will provide an empirical insight into the relationship between
controls and empowerment, thereby enhancing the knowledge of managers in respect to the
desirability of enabling controls in facilitating employee empowerment.
Second, the focus on the relationship between enabling controls and employee
empowerment addresses calls in the literature for organisations to manage their employees
better with Lee et al. (1999) suggesting thattop management leadership,which can be exerted
through the useof controls, is essential for employeeempowerment. In addition, many studies
infer that human resources are the most important asset of an organisation (e.g. Brown and
Eisenhardt, 1998; Hamel and Prahalad, 1994) and need to be managed appropriately.
The analysis will also contribute to previous research in this area which has found that the
“empowerment of employees is dependent on the provision of a supporting organisational
environment”(Bairdand Wang, 2010, p. 576). In particular, thefocus on the role of leaders in
implementing appropriate controls is considered to be highly relevant given Foster-Fishman
and Keys’(1997, p. 350) claim that a “critical cultural precondition”of empowerment is trust
which “may emerge as a belief in the positive vision of organisational leaders”.
Third, while previous studies have examined various factors related to employee
empowerment (Baird and Wang, 2010; Ugboro and Obeng, 2000; Foster-Fishman and
Keys, 1997), this study provides a unique perspective by focusing on the association
between Simons’(2000) enabling (beliefs and interactive) use of controls and employee
empowerment. While the majority of previous studies have examined the impact of Simons’
four levers of control (LOC) in isolation (Su et al., 2015; Widener, 2007;
Kober et al., 2007; Bisbe and Otley, 2004; Abernethy and Brownell, 1999), this approach is
consistent with recent studies which have examined the combined effect of pairs of levers
(Tessier and Otley, 2012; Mundy, 2010), and is in line with Simons’theoretical combination
of the levers and conceptualisation of control as a system of control practices (Spekle et al.,
2014; Simons, 1995). In addition, while previous studies have examined the direct impact of
the levers on organisational performance (Su et al., 2015; Widener, 2007), this study
contributes to the literature by examining the role of employee empowerment in facilitating
or exacerbating the influence of enabling controls on organisational performance.
Finally, while many studies advo cate the benefits of employee e mpowerment
(Appelbaum et al., 2013; Greasley et al., 2005; Thomas and Velthouse 1990), amidst claims
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