Democracy in the Workplace

by Dr. Edward Lawler, III
University of Southern California

This call goes out to family business owners, managers and employees:Get involved in each other’s business!Read on and keep two ideas in mind.

  • One, any employee may have secret talents and ambitions that can help grow your company.  
  • Two, in the increasingly complicated work place, it becomes more and more difficult to judge the worth of a worker.

Democracy in the work place might sound like a lofty ideal based more on ethics than economics, but motivation expert and USC Business professor Ed Lawler has a formula for companies that may translate into results you can take to the bank (And it can help smooth out owner-successor relationships, too).

Total quality management.Creative problem solving groups.Suggestion teams.These are all innovations the publicly-traded family business Motorola Corporation has used to restrict the growth of management layers in the organization.Why? “Supervision costs money.”

That’s Ed Lawler’s simple reason for why managers and business owners should consider sharing decision-making power with their employees.Lawler freely admits that many people come to work and don’t want the added anxiety of making decisions.Some workers want to just tune out at work.But there are others, he says, whose potential never gets tapped.They come to work, do what they’re told, then go home and sit in the president’s chair of their local PTA, having to come up with creative solutions to difficult problems.To never discover the ability of people like this is the kind of oversight that can cost a company money.

“If the only value an employee is adding to the company is manual skills or manual labor and perhaps the ability to do very routine mental tasks,” Lawler explains, “you’re really not adding much value relative to the labor costs that exist in a high wage country.If you’re only getting paid 50¢ an hour and you’re doing simple tasks, whether mental or physical, that’s no big deal because that’s a world class standard.

But if you’re getting paid $15 an hour and that’s all you’re doing, that company is going to be in trouble if it has any competitors who are operating in low-wage countries or are simply using their labor force more skillfully–getting more value. Value can be added by the task that you do and value can also be added by people needing less supervision and less staff support, less direction, less control; all of which costs money and adds to the cost of doing business.”

In military combat, says Lawler, decisions need to be made quickly, leaving no time to poll opinions.But in so doing, he adds, the general on his horse may be missing valuable information and support that can only come from the people on the ground, the soldiers.The opportunity for involvement may be one of the keys to creating a more honest work environment where employee’s potential can flourish as owner’s supervision time diminishes.

Judging Value in a Democracy

In the last decade, says Lawler, services and products have become highly complicated.When returns that can be counted are the primary signs of success, an employee’s worth is plain to see.But in companies where the roots of success are not visible, Lawler suggests managers should get involved in defining goals and measures of success with their employees.He illustrates the point with the example of parking fee collectors at LAX airport; a group of workers whose mission is quite straight forward–collect the change and don’t steal.

“That’s not a challenge,” he says. “You want accuracy and you want no shortages in cash and so forth, so you don’t really need a lot of participation (from the managers).But if the people you’re managing are doing a software engineering task, then it may not be so easy to decide whether they did it well or not.”

As a remedy, Lawler suggests supervisors include their workers in coming up with goals for the worker, ways of achieving those goals, and measures of success. This way the employee feels a sense of ownership over the job and a real accountabilityfor his or her performance.

The idea, he continues, is “to give people a whole piece of work to be sure that what they are doing is interesting and challenging and to be sure that they get feedback about how well they perform.If it’s a service situation, you try to give the employee ownership over a customer.It’s their customer.They’re supposed to complete the sale or the transaction and you measure customer satisfaction and they’re accountable for it and they get feedback.You keep their sales record for them.

When it comes to Family Business, Ed Lawler has noted what he calls an “entitlement mentality.”Family members in the business are entitled to a great deal of fringe benefits and social support simply by being a member of the family.This is, of course, the beauty of working for Mom and Dad.

The thorny side of this sometimes rosy situation comes when family business owners look for results from their successors.All of a sudden, Mom and Dad start to doubt the worth of their darling successor. Why?Probably because they are judging performance according to behavior and not results.”John has been acting so lazy this month.No wonder our sales are down.”Take Lawler’s advice:sit down; father and daughter; mother and son, and draw together a road map for job performance, sign posts and all.

Dr. Edward Lawler, III, a USC management and organization professor and founding director of the Center for Effective Organizations has consulted four national governments and 100 organizations on the issues of employee involvement, organizational change and compensation. This article was based on an interview with Dr. Lawler and his book, Motivation in Work Organizations (San Francisco: Josey-Bass Publishers, 1994).